Advantages of setting up manufacturing unit in India

 Setting up manufacturing unit in India


India is the 7th largest economies in the world and one of the fastest growing economies in the world. India is in the threshold of transition from developing to developed economies in the world.

 

Despite being in the process of development, India's economy has a significant influence on world trade. The vast majority of the most developed countries in the world are eager to establish or deepen relations with India.

 

India has a 5,000-year history of embracing visitors from abroad, and this welcoming attitude makes it easier than ever for foreigners to start businesses there. India is a great place for business because it has the world's fastest growth rate and the seventh-fastest growing international economy. There are several benefits for foreign company registration in India, from the career-focused young to the abundance of experienced specialists, backing from the government to business-friendly regulations and appealing foreign policies.

 

Due to the aforesaid reasons India is witnessing huge foreign direct investment in recent years. More and more foreign companies are setting up manufacturing units in India.

 

There are many options for doing business in India by any foreign company; however, one of the most popular and widely used entity structures for setting up business in India is in the form of subsidiary company registration in India since it has many advantages including lowest corporate tax rates.

 

In this write up, we will examine some of the advantages of factory set up in India by foreign companies.

 

Advantages of setting up manufacturing units in India

 

a)      Huge market

 

India is second largest population in the world after China and soon it will surpass China in terms of its population. Further, it is one of the largest middle class consumer base with good purchasing power. Due to such large market and deep pockets, India is home for almost all the fortune 500 companies in way or the other. Further, this trend will continue in near future for next 2 to 3 decades. Therefore, it becomes advantageous for any foreign company to set up manufacturing unit or factory in India.For many years to come; global businesses are likely to be drawn to India because of its young population and expanding economy.

 

b)      Political Environment

 

India is largest democracy in the world and provides political stability. This enthuse confidence amongst the foreign investors to make investment in India and earn profits from Indian consumers. Unlike many countries, which are facing civil wars or anarchy, Indian robust political stability provides a conducive environment for doing business in India.

 

c)      Skilled manpower at low cost

 

Another advantage of India is that it can provide highly skilled and unskilled manpower with very less lost as compared to western countries. India has been home to highest numbers of engineers and technocrats in the world. Further, India is second largest English speaking country in the world. This provides a huge advantage to foreign entities which want to set up business in India and repatriate profits out of India. With the support of regional and bilateral free trade agreements, India has a sizable network of technical and management institutions that meet the highest international standards. In addition, there are many other trading partners available. These organisations produce top-notch human resources.

 

d)      Government’s initiatives and incentives

 

Of late, government of India has realized the importance of foreign investment in the country and open up the Indian economy for global players in the year 1992. Post liberalization of Indian economy in the year 1992, the government of India has taken many initiatives to attract foreign investment in the country as well as to encourage more and more foreign companies set up their business in India.

This includes liberalization of FDI policy, ease of doing business, introduction of single window clearance for multiple licenses and approvals, setting up export promotion councils at district levels, Make in India scheme, schemes for upliftment of MSME sectors, PLI scheme, strat up India scheme, stand-up India and skill- India schemes.

 

All these schemes are aimed at creating an eco-system wherein India can become a manufacturing and start up hub in near future and can provide an alternative supply chain to reduce the dominance of China in the manufacturing sector.

 

India aspires to become 5 Trillion dollar economy in next 5 years and second largest economy in next 25 years. Therefore, there is huge potential for foreign companies for setting up their manufacturing units in India. Business setup in India

 

Location: United States

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