Apart from being a critical driver of economic growth, foreign direct investment (FDI) is a major source of non-debt financial resource for the economic development of India. Foreign companies invest in India to take advantage of a young, well-educated, English speaking workforce, relatively lower wages, special investment privileges such as tax exemptions, relaxation of FDI policy across various sectors, improvements in bankruptcy act, significant relaxation to repatriation of dividends and revenue by foreign owners. For a country where foreign investments are being made, it also means achieving technical know-how and generating employment.
We expect to see major activity and interest by foreign investors in Indian businesses, which are serving the Indian consumer through technological advancements. There has been successful tech investments across e-commerce, logistics, fintech, healthtech, online marketplaces, and internet of things in the last few years. Major global VC and PE investors have made sizeable investments into the Indian consumption story.
We expect to see further meaningful investments in Indian fintech, healthcare and smart cities. We also believe some of India’s successful start ups, who received investments through VC investors will be planning their second rounds of funding through private equity, or family offices. Successful Indian startups like Paytm, Flipkart, Just Buy Live, Oyo rooms, Snapdeal, Ola Cabs, OLX Shopclues, Freshdesk are shining examples of foreign direct investments into Indian companies.
