India is the fifth largest economy in the world and it's the largest democracy. India has the second largest GDP among emerging economies, based on purchasing power parity. India also ranks as the 11th largest economy in terms of industrial output and has the third largest pool of scientific and technical manpower.

Until1991, the Indian economy, designed largely on a socialistic pattern, was characterised by a highly regulated business environment, a pervasive license system, and high tariff barriers. Sweeping reforms since introduced by successive governments have radically changed the course of the economy. Today the Indian economy is far more simple, liberal, transparent and geared towards promoting private investments, both domestic and foreign. External trade has been liberalised, tariffs steadily lowered and import controls progressively reduced, while the few that remain are proposed to be freed within a fixed time frame. Tax rates, both corporate and personal, have been rationalised and are at present amongst the lowest in the world.

There exists today, a strong political consensus on the current economic policies, not only at the central level but also amongst all states, that ensures the continuation and progressive strengthening of investor friendly policies.

There are several good reasons for investing in India.

• One of the largest economies in the world.
• Strategic location - access to the vast domestic and South Asian market.
• A large and rapidly growing consumer market
• Foreign investment is welcome; approval is required but is automatic in sixty categories of industries.
• Skilled manpower and professional managers are available at competitive cost.
• One of the largest manufacturing sectors in the world, spanning almost all areas of manufacturing activities.
• One of the largest pools of scientists, engineers, technicians and managers in the world.
• Rich base of mineral and agricultural resources.
• Long history of market economy infrastructure
• Sophisticated financial sector.
• Vibrant capital market
• Well-developed R&D infrastructure and technical and marketing services.
• Policy environment that provides freedom of entry, investment, location, choice of technology, production, import and export.
• Well-balanced package of fiscal incentives.
• A sophisticated legal and accounting system.
• English is widely spoken and understood.
• Rupee is convertible on current account at market-determined rate.
• Free and full repatriation of capital, technical fee, royalty and dividends.
• Foreign brand names are freely used.
• No income tax on profits derived from export of goods.
• Complete exemption from customs duty on industrial inputs and corporate tax holiday for five years for 100 per cent export-oriented units and units in export processing zones.
• Corporate tax applicable to the foreign companies of a country with which agreement for avoidance of double taxation exists, can be one which is lower between the rates prevailing in any one of the two countries and the treaty rate.
• A long history of stable parliamentary democracy.

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