India is a large and emerging economy that has been in focus over the last decade. One of the reasons for that is the large population, and the recent growth in GDP. In 2013, India’s GDP is expected to grow at a slightly lower rate of 5-6%, which is agreeably less than China’s projected growth of 8%. However, this is still far higher than rates of the US (2-3%) as well as Euro-area (<1%). India has a democratic establishment, and is a more convenient destination for entrepreneurs from the West.
There have always been concerns about bureaucracy in the country, which has further been highlighted by the policy freeze in 2012. Since then, however, the Government has been able to assuage business concerns by passing several market friendly policies. Industries have been opened up partially or, in some cases, entirely for foreign investments. Modern Retail, Insurance, Defence, Telecom, Media are just a few sectors that have increased the level of allowed foreign investments. Though, in some sectors, the level of investments allowed is not high enough, it does give investors a chance to test the Indian market. When the economy is further opened up, the experience gained over these years will be critical in managing future investments.
With the appointment of Raghuram Rajan as the new Governor of the Reserve Bank of India in September 2013, the Rupee has seen much lesser volatility in the market. He has taken it upon himself to correct the wrongs in the system to ensure inflation, which was skyrocketing for the past couple of years, is brought down to an acceptable level. This initiative has seen him make tough calls already in his first couple of months. Interest rates are also expected to fall accordingly, which will bring down the cost of money.
Vaibhav Sharma 