India is ranked as one of the fastest growing economies in the world and has vast resources and potential, including a highly skilled professional workforce. The country is classed as being in the top twelve industrial nations having developed a highly diverse manufacturing sector that includes both traditional and new industries.

The country sought to achieve its development objectives by concentrating on cultivating its capabilities, becoming agriculturally self-sufficient, and fostering a wide range of manufacturing activities based on its natural resources.

• Liberalization by reducing state involvement in the public sector and opening up industries to private domestic and foreign investors.
• Deregulation in energy industries, the removal of import barriers, development of both the manufacturing and services sectors and major progress in infrastructure development.

• GDP from 9,171 billion in 1994-95 to 19,780 billion in 2000-01.
• Between 19994 and 19797 GDP grew at an average of 7.5% per year and inflation fell from double digit figures to 7%.
• Significant improvements were also witnessed in foreign reserves, exports, investment and employment.
• Agriculture continues to play an important role , accounting for 25.3% of GDP in 2000-01, down from 32.7% in 1988-89. Trade, hotels, transport and communications is the second largest sector in terms of GDP, making up 21.3% of the total, and manufacturing the third providing 15.1%.
• In 2000-01 the fiscal deficit was Rs 1,188 billion, or 5.7% of GDP, a decrease from 1999-2000 when the deficit peaked at 11.2% of GDP.
• Revenue receipts are expected to rise by over 15% to Rs 2,451 billion from an estimated Rs 2,126 billion in 2001-2002. The additional revenue is expected to come from rises in income tax surcharges and the rationalization of excise duties.
• Restructuring in agriculture, food processing and the banking and finance industries is expected to increase revenue from corporate sources.

• The key reasons for the rupees’ appreciation has been the US dollar’s weakness and strong dollar inflows into India.
• Dollar inflows into India have been increasing at a scorching pace. The forex reserves of India have crossed the US$ 80 bn mark.
• The country recorded a current account surplus after 23 years in FY02 and has maintained the surplus in the first nine months of FY03.

• For many industries FDI is approved automatically through the RBI. The FDI ceilings range from 50% to 100% depending on the type of industry. The Foreign Investment Promotion Board (FIPB) approves all other foreign investments.
• With a large and fast growing consumer market, an extensive pool of natural and human resources, and a developing economy. India is promoting as having a good potential for investors.
• The Indian Investment center, a government organization, is the first point of contact for both foreign and non-resident Indian investors, providing advice on opportunities, policies, taxation laws, incentives and potential partners.
• FIIs inflows into the country, especially through the debt market could be attributed to the arbitrage opportunity provided by the relatively higher interest rates in the Indian market coupled with falling forward premiums.
• Foreign institutional investors are allowed to invest in listed and unlisted Indian companies and domestic debt securities. No restrictions apply to the movement of the funds in and out of the country, to the lock in period, or to the total volume of the investments. Foreign brokerages may also operate in the Indian Stock markets on behalf of FIIs. Combined FII holdings in any one company are restricted to 30% and individual FII holdings to 10%.