Buzz Archive:
Doing Business In India - A Legal Overview Part 2

by Sumeet Kachwaha, Partner, Kachwaha & Partners, 9/16/2008

Indian civilization dates back to over 5000 years. Its long history has witnessed many cycles of progress and decline. Of late, the country is seen as emerging from a long spell of poverty and deprivation. The spotlight is back on India.

After an economic crisis in the early 1990s, the country truly started to embrace economic reforms. This has brought about a dramatic change in the fortunes of the country. Within a very short period India has emerged from the shadows of poverty and has become a super power in the making. Some economic indicators are as follows:

• India's GDP is growing at 9% per annum - the second fastest in the world.
• According to Goldman Sachs, Indian economy is set to overtake that of Western Europe by 2030 and by 2050 it is set to overtake the US economy to become the second largest economy in the world, (next only to China). In terms of Purchasing Power Parity (PPP) India is already the third largest economy in the world.
• The forex reserves of India currently stand at US$ 230 billion. In March 1991 when India was in the throes of its financial crisis it stood at merely US$ 5.8 billion.
• According to US Department of Commerce, India has amongst the highest returns on Foreign Investment and as per the FDI Confidence Index, India is amongst the three most attractive FDI destinations in the world.
• In the first quarter of 2007, there were 72 foreign takeovers by Indian companies worth nearly US$ 25 billion. (Yes, VC's call these exits)
• India's capital markets have soared six times in five years.
• 26% of the US technology companies founded by immigrants in the last decade have an Indian founder, which is more than those from the U.K., China, Taiwan and Japan combined.
• 1/5^th of the Fortune 500 companies have set up R&D centres in India. Some like, Microsoft have their only R & D centre outside their home country in India. IBM has its largest non - US workforce in India.

As the second of a three-part series on investing in India, VC Experts welcomes Sumeet Kachwaha, Partner, Kachwaha & Partners, an expert in doing business in India.