India is the fifth largest economy in the world and the most populous democracy. This vast country boasts an immensely rich cultural heritage including numerous languages, traditions and people. In the last decade, a stable political environment combined with positive macroeconomic parameters and strong policy reforms have propelled India as a leading destination for global investment. India rose to 62nd place out of 190 nations in the World Bank’s Ease of Doing Business 2020 report – up from 142nd place in 2014. Prime Minister Modi aims to make India a USD 5 trillion economy by 2025 and in order to achieve this, the government has focused on ‘pro-business policies’.
With this backdrop, India presents many opportunities to global institutions and this has driven a recent influx of foreign investments into the market. To encourage this inflow, Indian regulators continue to make significant modifications to the various laws and regulations that govern the routes for foreign investors to access India. The aim is to position India a favourable market for international investments.
Landscape for foreign investment in India
There are five main routes available to international institutional investors to access investments in India:
A. Foreign Direct Investment (FDI);
B. Foreign Portfolio Investment (FPI);
C. Foreign Venture Capital Investment (FVCI);
D. External Commercial Borrowings (ECB); and
E. Investment in Alternative Investment Funds (AIF)
This latest India guide provides a comprehensive view of the FDI, FPI, FVCI and IFSC – GIFT city policies and what they mean for foreign investors investing into India. The information contained in this document is updated to 31 March 2022. For any subsequent updates, readers are advised to consult with their investment advisors/ tax consultants or visit the relevant regulatory websites.
Please contact our award-winning team of experts who will be happy to share their expertise and guide you through the investment routes.
Rohit Dodla Reddy
Head of Securities Services, India