India – A new Business Partner

15. Oktober 2008: India has become one of the top foreign investments destinations in the world today, amounting to some 5,135 Billion USD in 2005-2006. This represents an increase of 60% over the corresponding figure last year. Keeping track of past trends, a further increase of 50% is expected. Economic Reforms initiated in 1991 have brought dramatic changes in international investment in India.

Since then, the US Department of Commerce has identified India as one of the world’s top the „big emerging markets“. India has a vibrant capital market and a highly developed stock market with more than 9000 listed companies. The developed Indian banking system allows for market-determined interest rates and is able to price credit. India also has an active domestic credit market with lively corporate and government bond markets and interest rate & credit derivative markets.

The drivers of economic activity in India are private enterprises and not the state. While no company of any size aspiring to be a global player can for long ignore this country, which is expected to become one of the top three emerging economies, success in India will depend on the correct estimation of the country’s potential. An underestimation of its complexity or and overestimation of its possibilities can lead to failure.

Entering India’s marketplace requires a well-designed plan back up by serious thought and careful research. Difficulties in understanding the Indian culture, its administration system and its constantly changing legal rules are not uncommon. Nevertheless, those who take the time and look into India as an opportunity for long-term growth and not short term profit are likely to find the trip well worth the effort.