The Political Investment Environment of India
FIN610 Global Investment
Prof. Surya. Chelikani
Siyu Wu
Sep. 09, 2013
The Political Investment Environment of India
Investing in a country needs to take a look at all the political, economic, social and technological environments. India, as one of the post BRIC countries, developing with high economic growth, comparatively stable social and political environment, and essential infrastructure, attracts people all over the world to look for investing opportunities and start business here. Like the situation in China, it is important and critical for investors to know local political environment and government relations if planning to run business locally in India, since government has large rights over a lot of affairs. After doing some research, I find that there are supports as well as some obstacles placed from political environment. According to Embassy of the People’s Republic of China in India, before 1991, India government was cautious of opening domestic market to foreign investors. Introduction of foreign investment industries were mostly considered to be advanced technology or which can ensure product export. However, India government changed the attitude that they cancelled some limitations to FDI (foreign direct investment) and established Foreign Investment Promotion Board and Cabinet Committee to encourage FDI, expanding the entry scope of FDI and relaxing equity holding limits. Indian government encourages foreign capital to flow to the new and high technology industries, especially software industry. Thus there are preferential policies on investment in software industry, such as exempting taxes of import and export software, exempting income tax in 10 years, setting standard international intellectual property rights to protect foreign investors. What’s more, as stated in the agreement on Trade-Related Investment Measures (TRIMS), Indian government reduced and eliminated discrimination of foreign
Prof. Surya. Chelikani
Siyu Wu
Sep. 09, 2013
The Political Investment Environment of India
Investing in a country needs to take a look at all the political, economic, social and technological environments. India, as one of the post BRIC countries, developing with high economic growth, comparatively stable social and political environment, and essential infrastructure, attracts people all over the world to look for investing opportunities and start business here. Like the situation in China, it is important and critical for investors to know local political environment and government relations if planning to run business locally in India, since government has large rights over a lot of affairs. After doing some research, I find that there are supports as well as some obstacles placed from political environment. According to Embassy of the People’s Republic of China in India, before 1991, India government was cautious of opening domestic market to foreign investors. Introduction of foreign investment industries were mostly considered to be advanced technology or which can ensure product export. However, India government changed the attitude that they cancelled some limitations to FDI (foreign direct investment) and established Foreign Investment Promotion Board and Cabinet Committee to encourage FDI, expanding the entry scope of FDI and relaxing equity holding limits. Indian government encourages foreign capital to flow to the new and high technology industries, especially software industry. Thus there are preferential policies on investment in software industry, such as exempting taxes of import and export software, exempting income tax in 10 years, setting standard international intellectual property rights to protect foreign investors. What’s more, as stated in the agreement on Trade-Related Investment Measures (TRIMS), Indian government reduced and eliminated discrimination of foreign
References: 1.http://www.aboutindia.asia/business-and-politics/indian-political-environment-overview/ 2.http://blog.euromonitor.com/2011/09/corruption-impacts-indias-business-and-political-environment.html 3.http://www.globalsmes.org/news/index.php?func=detail&detailid=458&catalog=33&lan=gb&search_keywords= 4. http://in.chineseembassy.org/chn/jjmy/ydjmzc/t200875.htm 5. http://doc.mbalib.com/view/496bb448ef4114051bc0b8c21e785af4.html