It is with pleasure that I introduce the new edition of the India Business Guide 2012. Since its first publication in 1997, the guide has proved to be a useful tool for Netherlands investors and entrepreneurs exploring India as a new market. It gives all the information needed ranging from a general description of the Indian economy to more practical information like foreign investment regulations and taxation laws. There’s also a chapter on “Useful Business Advice” which covers the lessons learned from experienced Netherlands entrepreneurs already active in India. Their most important tip: be patient, in the long run it will pay off.
Doing business in India is doing business in a country with a population of more than 1.21 billion people. The strong Indian growth story, based on the structural strengths of a young population, domestic consumption and investment, has attracted significant investor attention in recent years.
However, developments in the past year have shown that the Indian economy is still prone to effects of the unprecedented global financial crisis. Sudden changes in the inflation rate, growth rate, exchange rate, and capital markets are testaments to the increasing integration of the Indian economy with the global economy. The impact of the global financial crisis, however, has so far been less severe in India than other countries. Real GDP growth averaged at 8.8 percent between 2003 & 2008, witnessed a minor slump between 2008 and 2010, and recovered to 8.6 percent in 2010-11.
India is known for its highly skilled labour force that speaks English and knows the Western culture. While its size and growth potential make India attractive as a market, the most compelling reason for investors to be in India is that it provides a good return on investment. This can be witnessed by the growth of the number of foreign investors who are increasingly looking at India and are exploring the opportunities of its market. Also Netherlands companies are increasing their investments in India.
India is now poised to reap its demographic dividends. Its rapidly increasing consuming class provides the world with huge market potential. Given its strategic strengths and rapidly growing economy, India serves as an ideal destination for Dutch investors.
Entry into the Indian market is not always easy. It can occur that there is bureaucratic delay, over regulation and unclear quality standards. It might also take some time to fully understand the business culture. But beyond doubt, the Indian market has potential and a lot to offer to Netherlands entrepreneurs.
The purpose of this publication is to provide interested Dutch business people with an introduction to the more important aspects of doing business and investing in India. It provides an overview of the FDI framework, tax laws and regulations in India among other crucial things. The publication has been prepared by Ace Global Consulting LLP, drawing on their experience of preparing the Indian Business Guide for the Embassy of The Netherlands in India for many years.
I hope this revised edition of the India Business Guide, customised for The Netherlands business people helps you to find your way in this fascinating sub-continent. I am confident that it will enhance your understanding of the Indian business environment. But if you are still left with unanswered questions, please let us know. The Netherlands Trade Network in India, with offices in New Delhi, Mumbai, Chennai and Ahmadabad, is at your service and is more than willing to assist you in your quest on the Indian market.
Bob Hiensch
(Ambassador)
