2015 was a great year for foreign companies looking to invest or set shop in India. The Make in India program was launched to turn the country into a global manufacturing powerhouse — by facilitating investment, fostering innovation, providing state-of-the-art manufacturing equipment, and protecting the intellectual property of individuals. Additionally, the government also digitalized registration processes and made funding easily available for entrepreneurs and investors: whether from India or abroad.
Make in India was launched on September 25, 2014, with a focus on manufacturing in 25 major sectors of the country. The launch date was one month post India’s Mars Orbiter Mission and the country’s recent successes in manufacturing, technology, and science, gave Make in India the momentum it needed. Interested foreign groups witnessed India’s capabilities and as a result engaged in talks about investing in the various sectors. The government’s aim was to put India on the industrial world map — a sure way to encourage talks with foreign investors to invest in the country.
India’s presence as one of the fastest growing economies could be felt when it was included among the top 3 destinations for inbound foreign investment. The government also introduced new policy measures to benefit and ease FDI norms which further helped India maintain its position. Increments made to the allowed FDI, in 15 of the 25 sectors of Make in India, allowed more freedom and flexibility to foreign investors. Investor groups comprised individuals, companies, as well as other foreign institutional investors.
Make in India launched with two main goals: 1) To grow the manufacturing sector and 2) To directly benefit all involved in the program. The Indian government planned to facilitate these goals by eliminating unnecessary laws and regulations, as well as making legislative processes more efficient. Policies were made to allow more transparency, effectiveness, and accountability in the government — the final objective being simplified foreign investment.
In 2016, foreign companies can choose from various available options to do business in India:
Setting up a non-corporate entity
- Liaison office
Subject to the approval of the Reserve Bank of India, a foreign company can set up a liaison office in India. In addition to representing the foreign company, a liaison or representative office can also undertake liaising activities for them.
- Branch office
After obtaining a specific approval from the Reserve Bank of India, foreign companies can operate in India through a branch office. Additionally, a branch office can undertake activities like import and export, conducting research, and providing IT services.
- Project office
If engaged by an Indian company to execute a project in India, foreign companies can set up a project office in the country. A project office is taxed at the rate applicable to the foreign company in their home country and is also treated as an extension of the same.
Setting up a corporate entity
- Wholly-owned subsidiary
Subject to FDI guidelines, a foreign company can set up wholly-owned subsidiary companies in India. Wholly-owned subsidiary companies have maximum flexibility — in terms of buyer approach and market growth plans — when compared to a non-corporate entity like liaison or branch office.
- Joint venture with Indian partner
Foreign companies can set up a joint venture with a foreign or Indian company in India. Laws governing domestic companies apply to joint ventures — there are no separate laws for joint ventures in India.
- Foreign Institutional Investors (FII’s)
FII’s can invest in securities of primary and secondary markets like equities and other instruments listed in the National Stock Exchange of India Limited. Additionally, they can also invest in financial markets through pension and mutual funds.
Whether a foreign investor looking to survey the country or a businessman looking to relocate and set shop in India, Make in India showcased India’s dynamic growth and investment potential to the world. Professional national investment promotion and facilitation agencies are now equipped to assist foreign companies with their investments in India. Ease of doing business in the country, with expected growth and results, is making room for more foreign investment.
The decision to move to India should be followed by plans to execute it successfully. International companies may be unaware of the details or the scenarios they may face and are usually unprepared. Globe Moving a specialist in International Moving and Relocation Services has both the resources and the experience to help Corporates and Individuals with queries related to relocating people and goods to India. Here is how Globe Moving can help:
- Relocation Services – Look See Orientation Trips, Temporary Accommodation, Home Search , School Search, VISA and Immigration, Tenancy Management, Departure Services
- International Household Goods Moving
- International Office Moving
- International Commercial goods Moving
- International Pet Moving
Come, Make in India with Globe Moving