Major Benefits of Starting a Business in India for Foreign Entrepreneurs

Despite the economic fluctuation and tumultuous socio-economic scenario, India's dominance in international business is continuing. Assuredly, COVID-19 pandemic is creating upheaval in the global economy. But its impact on international business and international business relations is not so severe, especially in the case of India. FDI in India is continuously blooming, between January-April 2021, India attracted total foreign direct investment (FDI) inflow of $72.12 billion, which is the highest ever for the first ten months of a financial year.

Since the Economic liberalization in 1991, India has been an intriguing market for foreign businesses and entrepreneurs. Massive foreign investment is an indicator of the promising future of the Indian economy. If we talk about competitiveness in international business, then India and China are two nations that are likely to play a pivotal role in driving the world economy. But significantly, COVID-19 pandemic has damaged China's image in the business world, and assuredly after COVID-19 things will be not so smooth and easy for China, especially in the matter of international business.

As a result, India will be a favourite nation for foreign entrepreneurs to start businesses and investment in the country. India's stable economy, business-friendly policies, technical revolution, and massive consumer market allow foreign companies to expand their plans by identifying growth opportunities at a granular level. Doing business in India has numerous advantages; this post aims to highlight the top advantages of starting a business venture in India for foreign entrepreneurs.

India is emerging as a powerful economy in the world. According to the McKinsey Global Institute, a prestigious American worldwide management consulting firm, 69 cities in India will have a population of over one million each by 2025. This is going to translate into a greater need for businesses to support livelihoods. Besides, Indian youth will move toward metro cities from the rural areas that mean a large population will join the middle-class income group. According to a further report by McKinsey Global Institute, the economy of metro city like Mumbai is likely to touch US$245 billion in consumption by 2030. In such a scenario, Companies entering India in the near future can take advantage of such favorable conditions.

With nearly 600 million labor forces of which the majority is below 35 years of age, India has one of the strongest and youngest labor forces in the world. This means a large pool of talented people will remain agile for a long time and they will available for services. Apart from Internet revolution, start-up culture has changed the mindset of Indian youth, especially youth who belong to the hinterland. They are now looking for opportunities beyond agriculture or daily wage jobs. Businesses can leverage this opportunity by creating employment and increasing productivity.

The Government of India is continuously reforming policies related to FDI in India, as a result, there is no requirement of Central Government's intervention of 100% FDI into a private limited company or limited company that automatically reduces the overall cost of setting up a business in India. Apart from that, the cost of business infrastructure required for business like labour, food, transportation, Internet, or even taxes are more affordable, compared to setting a business venture in the US, the UK, or any other European countries.

To encourage FDI in India and to fascinate foreign entrepreneurs to establish a business venture in the country, the Government of India passed several important bills in the Indian Parliament that are beneficial for most industrial sectors. These bills introduced transparency and uniformity in the Indian economy. Such business-friendly policies encouraged international players to actualize their plans of entering India.

The start-up culture is blooming across the country, which clearly indicates that India is ready to learn and grow. The flourishing start-up culture in the country is like a aggrandizement of new India. Today India's startups in domains like technology, e-commerce, and financial services are getting huge appreciation and accolades across the world. The presence of a startup ecosystem is a positive sign for the country and foreign entrepreneurs and it indicates that Indian market is open to accept new business ideas and easier for new businesses to enter the market.

Assuredly India's large and diverse business market is filled with immense potential and opportunities that allows foreign entrepreneurs to establish their business venture. But along with opportunities and potential, there are some challenges too such as vast and fragmented market, competition with the domestic and local market, complicated legal structure, etc. Therefore, to successfully navigate these challenges, it's mandatory to plan strategically and exhibit patience and commitment to the process.

To get any kinds of legal consultancy services in India to set-up the new business, please contact us at following details:

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