After a period of policy paralysis, India is again open for foreign business – and it is reaping encouraging results…writes Vijay Goel, chairman of the Asian Business Association of the London Chamber of Commerce
Business people generally welcomed the result, the democratically-minded everywhere applauded the process, but what is the reality one year on from Prime Minister Modi’s assumption of power in India?
There have been some frivolous headlines such as the one about civil servants having their golfing activities curtailed but there has been some substance too.
Increasing the stakes foreign investors can own in Indian insurers from 26% to 49% is a step in the right direction and should bring in much-needed capital to fuel a sector that is ripe for development. But there is a way to go as Indian banks can suck in 74% from overseas investors and the results have been tangible.
The signal though is the right one – after a period of policy paralysis, India is again open for foreign business – and it is reaping encouraging results. The Hinduja group, for example, a highly-successful and visible company in the UK and Europe have indicated that they plan to invest billions of pounds in the Indian infrastructure and defence sectors. Would that have happened if a pro-business government wasn’t in power?
This fits nicely with the much-publicised Make in India campaign which aims to transform the country into the world’s manufacturing hub, and the focus on building 100 smart cities. Companies from the US, Singapore and Japan have been showing an interest in the latter at least, and I have no doubt that some of the NRIs in the UK will take it up – that is if their non-dom status is not put at risk!
(Vijay Goel is chairman of the Asian Business Association of the London Chamber of Commerce and a partner at Singhania & Co. Please send comments to firstname.lastname@example.org)