Doing Business in India: Advantages & Disadvantages • Aerostar Manufacturing

As a fast-growing nation that also ranks as the world’s largest democracy, India is an intriguing market for overseas businesses and investors. In recent years, the country — which has a population of more than a billion — has seen a surge in economic growth and now ranks as the world’s fifth-largest economy by GDP. Indeed, India’s GDP growth is the highest in the world in the past decade, regularly achieving annual growth rates of between 6-7%.

However, very real challenges remain for those seeking to do business in the country.

In order to successfully navigate these challenges, it’s essential to plan strategically, perform due diligence, and exhibit patience and commitment to the process.

Advantages and benefits of doing business in India
Stable economy
India’s economic growth has been exceptional in recent years. Buoyed by a robust democracy, key structural reforms, private consumption, and a rise in government investment, India has achieved a high macroeconomic stability ranking (with a score of 90 out of 100 and ranked 41 out of 141 economies) in the World Economic Forum’s (WEF) Global Competitiveness Index.

Business reforms
In a bid to attract foreign investment, the Indian government has eased foreign direct investment (FDI) restrictions, such as raising foreign equity caps for insurance and defense, leading to significant progress in terms of improving its overall business environment. As a result, the country has jumped 14 places to 63rd position on the World Bank’s Doing Business 2020 study. New business reforms have also earned India a place among the world’s top ten improvers for the third consecutive year according to the same study.

Junaid Ahmad, World Bank Country Director in India, praised this achievement: “India’s impressive progression in the Doing Business rankings over the past few years is a tremendous achievement, especially for an economy that is as large and complex as India’s. Special focus given by the top leadership of the country, and the persistent efforts made to drive the business reforms agenda, not only at the central level but also at the state level, helped India make significant improvements.”