India ranks 3rd on the list of top prospective host economies, thanks to the ‘Make in India’ initiative
According to the World Investment Report (WIR) of 2016, India has landed 3rd place on the list of top perspective host economies of 2016-2018. This is due to the various recent government measures to boost the investment environment and bring in foreign investment.
Foreign direct investment and the ‘Make in India ’ initiative
The initiative was launched by the Indian government with an aim of promoting India as an important investment destination and a global hub for manufacturing, design and innovation, in September 2014. Additionally, it aims to increase the GDP and tax return revenues in the country, by producing products that meet high quality standards, and minimizing the impact on the environment.
Since its launch, the country has seen a surge in foreign direct investment (FDI), which has increased by 46 percent from $42.31 billion to $61.58 billion between the periods of October 2014 to May 2016.
Increase in Entrepreneurship applications
Industrial entrepreneurship memorandum (IEM) has seen an increase in membership applications since the introduction of ‘Make in India’ initiative. This signals a new attraction towards the Indian market as a significant place to set up a business. Relaxed regulation on foreign investors means a greater willingness on their part to set up subsidiaries or invest in the Indian economy.
Improving ease of doing business
The jump in FDI has led to the government taking various measures like opening up FDI in many sectors, carry out FDI related reforms and improving ease of doing business. Ministers are now being advised to simplify and rationalize the regulatory environment through business process re-engineering and the use of fast and effective information technology.
It has been assessed that since the launch of the initiative, the services, trading, automobile and power sectors attracted the most FDI.
The government has claimed that it has received Rs. 1.10 lakh crore worth of proposals from various companies that are interested in manufacturing electronics in India. With companies like Xiaomi and Huawei already setting up manufacturing units in India, while iphone manufacturer Foxconn expected to open a manufacturing unit soon, India’s economic strength is ever growing.