Foreign Direct Investment Opportunities in India: Recent Trends and Strategic Sectors

India, nowadays, is widely recognized as one of the world’s best destination for foreign direct investment, for the strategic combination of positive factors as the high economic growth rate, the presence of a skilled work force, a good credit rating and – above all – the government’s efforts towards ease of doing business.

Mr. Venkaiah Naidu, the Indian Minister of Urban Development, Housing and Urban Poverty Alleviation declared in October to a 50-member delegation of an Investment Association that many opportunities lie in various sectors in India, and in particular in the urban segment. The Association, a group of the world’s most prestigious and economically powerful institutional investors who together represent over $7 trillion in investment capital, had called on Mr Naidu to explore the opportunities for investments in various urban missions, and the Minister replied that under the “Smart City Mission”, the central government has committed to provide an assistance of about 1.13 lakh crore (grossly 3 million USD) till 2018-19 to improve basic urban infrastructure.

In New Delhi, on 4-5 February 2016, the Department of Economic Affairs of the Ministry of Finance organized an important Investment Summit where all these opportunities were mentioned.  During the Summit, the Chairman State Bank of India Ms Arundhati Bhattacharya stated that – in midst of global volatility – if there was one country that was growing, it was India, as the macroeconomic indicators in the country are positive and it is thus the right time to invest in India’s growth story.

For instance, during the summit, Kapil Dev Tripathi – secretary in the ministry of petroleum and natural gas – mentioned that a huge increase in energy consumption in India is expected, and thus important investments opportunities are expected as for building gas pipelines, expanding the national gas grid and expanding the PNG network.

Shri Nitin Gadkari, the Minister of Road Transport and Highways, expressed his will to increase the daily road construction from the current 18 kms per day up to 100 kms a day, and stressed the necessity to improve the ease of doing business by facilitating land acquisition, obtaining environmental clearances, obtaining clearances from the railways for building rail-overbridges and obtaining quarries for raw materials.

A foreign investor can nevertheless focus on all the others major sectors of economy, as in general the Indian Government is committed to boost the entire investment environment and to bring in foreign investments to the country, through the FDI-related reforms and liberalizations in many fields.

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