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  • Writer's pictureJoel Dsouza

10 Advantages of starting a business in India for a Foreigner

Updated: Aug 18, 2021

India, today is considered to be one of the major forces in the global economic market. Though India is a developing economy, its economy has a major impact on global trading. The majority of the world’s leading developed nations are keen to have or expand their ties with India. Thanks to its huge market base and fast-developing spending habits of middle-class Indians, India is a preferred destination for investors over other major countries be it any country around the globe.

With a 5,000 year heritage of welcoming foreigners to its shores, India welcomes diversity and this makes starting a business in India for a foreigner easier than ever before.

Advantages of starting a business in India

Large Population Macro economically large populations and a big market without borders with generally established logistics to do business are one of the major advantages of starting a business in India. India’s young population and growing economic power promise to be a magnet for foreign companies for decades to come.

Comprehensive Tax System India has a comprehensive network of tax treaties. Moreover, recently Indian tax system has been modified by the Direct Taxes Code as well as the Goods and Service Tax (GST) to provide ease of doing business.

Business-friendly Laws In recent years, several important bills that are beneficial for most industrial sectors have been passed in the Indian Parliament. The Goods and Services Tax Bill has increased efficiency in the movement of products across India. The Direct Taxes Code Bill has to clean up tax laws. But the most important (and most controversial) law will be the Land Acquisition Bill. The Companies Bill, which updates India corporate law for the 21st century, has also been passed. Such business-friendly laws make it easy for international players to actualize their plans of entering India. Low Operational Cost There are noticeable Low costs of operation possible from infrastructures to phones to the internet to labor to salaries to anything required to set up a business. Moreover, workers are ready to work at a low cost. Not only this but the tax strategies of India compared to other countries are very moderate and hence could cut the cost of operation of the business. Indian Financial System India has a well-regulated financial system that has access to developed markets all over the world and can be financed through multiple sources restricted to some rules and regulations of RBI etc.

Vast Trade Network India boasts a vast network of technical and management institutions that are of the highest international standards backed by regional and bilateral free trade agreements. In addition to that, there are numerous trading partners to trade with. These institutions develop excellent human resources.

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Strong base of English-speaking population India has a strong base of an English-speaking population for business purposes. The historical relationship between the UK and India means that Indians have a high level of English. Although the accent and vocabulary of Indian English are slightly different from that of British or American English, international organizations will benefit immensely from graduates’ ability to speak English fluently, as well as their command of the many local Indian languages. The relatively few language barriers make doing business in India quite attractive for international organizations.

Indian Work Ethics and Working Class Indians are known for their work ethics all over the world. The blend of hardworking nature with the willingness to learn and never say any attitude is what sets Indians apart from their South Asian counterparts. Moreover, the huge no. of Indian population falls under the working-age group i.e. 18 to 65 adds more years to service availability in the Indian Market. The youth has come out of the closet and now looking for opportunities. Businesses can leverage this opportunity by generating employment and increasing productivity.

Government’s initiatives The government of India has taken several initiatives to attract foreign investments in India’s diverse sectors. It has announced a number of attractive schemes and policies from time to time to lure investments. The individual ministries of different industries have made special attempts to ease the rules and regulations related to foreign investment in the industry.

Startup India Movement Under the head of ‘Startup India Movement’ the government is introducing several reforms to create possibilities for getting Foreign Direct Investment (FDI) and foster business partnerships. Some initiatives have already been undertaken to alleviate the business environment from outdated policies and regulations. This reform is also aligned with parameters of the World Bank’s ‘Ease of Doing Business index to improve India’s ranking on it. India is well endowed with mineral and agricultural resources and it has seen a significant increase in offshore outsourcing and manufacturing over the last couple of decades, which has helped India’s economy grow at a tremendous rate. It is very interesting how foreign companies and foreign investors are benefited from doing business in India.

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