Having second thoughts about investing in India? This article will describe the top 5 reasons to invest in India now.
India is one of the world’s fastest-growing economies and an attractive investment destination driven by economic reforms and a large consumption base. The International Monetary Fund (IMF) has projected India to be the third largest economy in the world in gross domestic product (GDP) in Purchasing Power Parity (PPP) terms measured at current prices. India’s nominal GDP is forecast to reach $8.4 trillion by 2030, surpassing Japanese GDP.
As per the IHS Markit, “An important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending.” Because of its rapidly growing consumer market and large industrial sector, India has become a hot investment destination for multinationals in many sectors, such as services, infrastructure and manufacturing.
Top 5 reasons to invest in India now
Here are some of the compelling reasons to invest in India now:
1. One of the fastest-growing major economies in the world
One of the fastest growing major economies in the world, India will not only overtake Japan to become Asia’s second largest economy, but would also be larger in size than the largest European economies of Germany and the UK. The following are the leading indicators of economic growth:
- The country received the highest ever annual FDI (Foreign Direct Investment) inflow of $81.97 billion in the financial year 2020-21 as per the Ministry of Commerce and Industry.
- The IMF projects India’s economy to grow at 9% in 2022, the fastest growing major economy in the world during the year.
- India has the largest youth population in the world. It is estimated that approximately 42% of India’s population would be urbanised by 2030 from 31% in 2011.
2. The Indian Unicorn Landscape
India has emerged as the third largest ecosystem for startups globally, only behind the US and China.
- According to Hurun’s Global Unicorn Index 2021, with 54 unicorns, India is now the third largest country in the world with the most unicorn startups – with a valuation of $1 billion or more.
- There has been exponential growth in Indian Startup Ecosystem in past few years (2015-2021):
- 9X increase in the number of investors
- 7X increase in the number of incubators
- 7X increase in the total funding of startups
- As of 28th January 2022, India is home to 72 unicorns with a total valuation of $286.27 billion. Out of which 44 unicorns were born in 2021 and 3 in 2022, with a total valuation of $90.67 billion and $3.10 billion respectively.
3. Rising global competitiveness
India has been rapidly strengthening its position in global competitiveness on account of major reforms that took place in recent years. Here are some visible results of the same:
- India ranked 63rd in World Bank’s Ease of Doing Business (EoDB) Ranking 2020, jumping 79 positions from 142nd in 2014.
- India ranked 43rd on an annual World Competitiveness Index compiled by the Institute for Management Development (IMD).
4. India rises in Global Innovation Index 2021
The country has been improving its innovative capacity and output for a few years. As a result:
- India ranks 46th among the 132 countries featured in the Global Innovation Index (GII) 2021.
- It also ranks No. 1 among the 10 economies in the Central & Southern Asia Region.
- India is in the 3rd position amongst the lower middle-income economy group.
5. Rising economic influence
India’s rise to power will have a greater economic influence across the Asia-Pacific Region in the next five years.
- India will be one of the largest manufacturing hubs of the world by 2030 as the increasing volume of the world’s goods will be transported via the Indian Ocean Region.
- Connectivity to Central Asia and Europe via the International North-South Transport Corridor (INSTC).
Why should NRIs invest in India
Irrespective of other reasons, NRIs should feel proud of investing in India and watch it grow, because it is your homeland. When you make India great, you will definitely receive an attractive return on investment with a strong sense of pride. There are plenty of active and passive NRI investment options available in India. Some of them are as follows:
- NRI FDs
- Mutual Funds
- Commercial Real Estate
- Micro VC Funds
- Asset & inventory financing
Everyone including PE, VC, and HNIs are looking at India for a percentage of their portfolio. As an NRI if you miss allocating some percentage income in India, you would probably be missing out on a big opportunity to grow your money this decade. Hence, it is the right time you start investing at least 10% of your income in Indian markets to grow together.
Let’s make India great together
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