India represents an economic opportunity on a massive scale. India offers multiple advantages. The legal framework that protects investment is one of the best in Asia. The economy offers an abundance of technical and managerial talent, often with international experience. Geopolitical risk is diminishing consistently, in contrast with some of India’s emerging economy rivals in Asia. And above all, India has a demographic advantage that should see its working age population continue to grow well into the century, increasing wealth and reducing cost.

Manufacturing investors can incorporate in India as Indian companies or as foreign companies. Indian companies may be joint ventures or wholly owned subsidiaries, and foreign equity ownership can be up to 100 percent. However, foreign equity caps apply to several sectors: for example, defense industries are limited to 26 percent foreign holding, aviation is limited to 74 percent, and trading companies are normally limited to 51 percent although up to 100 percent is allowed in some categories of trading.

Over the last 15 years India has changed much faster than many predicted. The door to foreign investment is now open, and the ambition to make investments work is tangible. The task of building an efficient economy remains an enormous one, but companies agree that India’s policymakers are moving in the right direction.

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