Automatic Route (A) New Ventures
Automatic Route (A) New Ventures
Automatic Route (A) New Ventures
CONCLUSION :
The Indian middle class is large and growing; wages are low; many
workers are well educated and speak English; investors are optimistic
and local stocks are up; despite political turmoil, the country presses
on with economic reforms. The rapid economic growth of the last few
17
years has put heavy stress on India's infrastructural facilities. The
projections of further expansion in key areas could snap the already
strained lines of transportation unless massive programs of expansion
and modernization are put in place. Problems include power demand
shortfall, port traffic capacity mismatch, poor road conditions (only half
of the country's roads are surfaced), low telephone penetration (1.4%
of population). Although the Indian government is well aware of the
need for reform and is pushing ahead in this area, business still has to
deal with an inefficient and sometimes still slow-moving bureaucracy.
The Indian market is widely diverse. The country has 17 official
languages, 6 major religions, and ethnic diversity as wide as all of
Europe. Thus, tastes and preferences differ greatly among sections of
consumers. The general economic direction in India is toward
liberalization and globalization.
There is always a constant fear for the investor of the frequent
changes in environmental legislations and policies in India. Long term
environment policies could be drawn up.
India is not a member of the International Center for the Settlement of
Investment Disputes, nor of the New York Convention of 1958.
Commercial arbitration or other alternative dispute resolution (ADR)
methods are not yet popular ways of commercial dispute settlement in
India. The recent introduction in Parliament of a new Arbitration Bill
signals the importance now accorded to this matter by the GOI.
However, India still has a heavy regulation burden among other
countries, e.g the time taken to start business or to register a property
is higher in India. Similarly, indirect taxes, entry-exit barriers and
import duties have been a major detriment to investment climate in
India.
18
All these issues are required to be addressed or at least partically
avoided for having higher FDI in India.
Though India is not a signatory to the Convention on Settlement of
Investment Disputes between States and nationals of other States,
many Bilateral Investment Agreements entered by India include an
ICSID Arbitration clause for settlement of disputes. The lack of
legislative and institutional reform is a barrier to FDI.
Though there are several set backs and deficiencies, the existence of
economic opportunities would not dissuade FDI in India.