Are Our Policies Failing to Attract Foreign Investors?

by Abhinav K. Digital Marketing Expert, Freelance

The inflow of (FDI) in an economy simply means expansion of production facilities, less burden in the current account deficit and appreciation of the currency in the international market. It is often said, that to convince one for the investment is the toughest part of the business, because every investor need return on immediate basis, which is difficult for a nation like India where policies are either too strict or not very clear. Whether it is licensing, taxation or intellectual property laws, there is always a certain amount of impurity.

Foreign investors are bit confused over government's long term plans and policies, especially about taxation issues. Many are apprehensive about double taxation and retrospective taxation. Although, India has signed the Bilateral Investment Protection and Promotion Agreement (BIPPA) with over 80 countries. However, nothing concrete is achieved so far. Investors are not very keen to invest in India, to address this issue, the government of India has cleared its stand on various prevailing issues. The first significant move is Prime Minister's assurance about the simplification of the taxation regime under the 'Make In India' campaign. Approval of 16 foreign investment projects of the total worth of Rs 6,750.86 crore is another push in this direction. Property Matter lawyer

This year, overseas investors have staked almost Rs. 94,241 crore in the capital markets, but analysis shows a decrease in the fund flows. Foreign investors expect more than China, Korea, Japan and Hong Kong in the Asian market than India because of their continued worries over issues like taxation and intellectual property rights (IPR).

According to Mr. Kislay Pandey, Corporate Lawyer, the Supreme Court of India, the scenario is changing rapidly, he said, "Once again, India is witnessing an acceleration in industrial production, we have strategically controlled the inflation and it is no more a havoc. Moreover, the economy is expected to grow at a rate of 7.8 to 8.0 in this fiscal year."

The finance minister has already announced that the present government is not interested to continue retrospective taxation. He, along with the prime minister is making diehard efforts to allure America and Europe. Things are improving gradually and fortunately most of the developed nations are not performing well, which is in fact a boon for the rising Indian economy. The government is already on the reform spree and many desired changes has been introduced to fuel the 'Make In India' campaign. Furthermore, there is an emergent need for better infrastructure, adequate power supply and a tab on red-tapism for making India a suitable destination to invest and do business.