India, currently the world's fifth-largest economy, is on track to become the third-largest economy by FY 2030-31.1 The country has experienced a meteoric rise in global stature in recent years and continues to attract investors and entrepreneurs from around the globe. It represents a strategic opportunity for global corporations to pivot and leverage the untapped professional. With its quickly rising economy, enormous consumer base and vast pool of skilled people, India has significant advantages for global investments.
Here are the top 10 reasons that make the nation an attractive destination for global investments.
1. Rapid economic growth
Several reports indicate that India’s economic growth and stability are poised to continue well into the future. With sectors such as manufacturing, construction and services expanding rapidly, India’s real GDP growth rate of 6.4% in FY 2024-25 is robust and steady.2 It is expected to grow between 6.3% and 6.8% in FY 2025-26,3 cementing the country’s status as the fastest-growing major economy globally.
2. Private consumption growth
The growing middle class in India has been one of the key factors driving a considerable increase in private consumption, creating unprecedented economic opportunities. By 2030, nearly 80% of households are projected to belong to the middle-income bracket, accounting for 75% of the nation’s total consumer spending.4 Consumer spending is expected to rise to $5.2 trillion by 2031, with the middle class accounting for 55%.5 This surge in private consumption is transforming India’s economic landscape and establishing a broad consumer base for a wide range of goods and services.
3. Demographic dividend
India presents several demographic and market advantages that make it an attractive investment destination. One key advantage is its youthful population. As of 2024, nearly 65% of the country’s population is between the ages of 15 and 64, positioning India uniquely to leverage its substantial working-age demographic.6 With a median age of 28.4 years, India’s young population is expected to reach its highest proportion of the total population by 2036, making it increasingly appealing to global investors seeking expansion opportunities.7
4. Supportive government initiatives
The Government of India has implemented several initiatives and reforms to streamline processes, reduce regulatory hurdles and create an appealing ecosystem for foreign investments. Notable among these are:
- Make in India
Launched in 2014, the Make in India8 programme intends to establish India as a worldwide manufacturing hub by providing simplified regulations, including tax reductions and subsidies, for establishing manufacturing plants for domestic and international manufacturers. It focuses on essential manufacturing sub-sectors such as defence, automobiles, biotechnology and electronics. The scheme has been instrumental in catalysing domestic production and technological innovation. - Digital India
The Digital India programme, launched in 2015, aims to build a digitally enabled economy by improving the internet infrastructure and connectivity across the nation.9 It promotes digital literacy, leading to a more tech-savvy workforce and customer base. India’s digital economy contributed 11.74% to the country’s GDP in 2022-23, amounting to $402 billion. The initiative remains crucial to India’s vision of building a Viksit Bharat by 2047. - Production-Linked Incentive (PLI) Scheme
PLI scheme was announced in 2020 to make domestic manufacturing globally competitive and to create domestic leaders in manufacturing. The scheme provides incentives — in 14 key sectors like electronics medical devices, pharma drugs, telecom, food products, automobiles and auto components, advance chemistry cell, textile etc. — to companies for increasing their manufacturing capabilities by spending on plant, machinery, equipment and associated utilities, R&D and transfer of technology. As of July 30, last year, 755 applications have been approved across these sectors, leading to an investment realisation of ₹1.23 lakh crore by March 2024.
5. Expanding industries
From cutting-edge technology to life-saving drugs and aerospace, India’s industrial ecosystem offers appealing opportunities for multinational companies looking to expand their operations. The services sector, manufacturing, automobiles and construction are traditionally the key sectors driving foreign direct investment in India. However, the IT & ITeS, electric mobility, FinTech, renewable energy and MedTech sectors are rewriting the new chapters in India’s growth story by propelling innovation and attracting investments.
6. Geographic location
Situated in the heart of Asia, India provides a gateway to a 3.2 billion consumer market, connecting supply chains across South Asia, Middle East and Africa. India is ideally positioned for investors seeking not only a large consumer base but also new supply chain routes and sourcing hubs.
7. Infrastructural advantages
India’s well-developed port, railway and road infrastructure offers distinct advantages to global investors seeking ready infrastructure. The nation has the world’s second-largest road network, fourth-largest rail network, third-largest domestic aviation market and a 7,500-kilometre coastline with 12 main and 200 non-major ports.10 Besides civic infrastructure, India’s ready industrial infrastructure, including 280 operational Special Economic Zones (SEZs)11, is a big draw among investors. The PM Gati Shakti, Sagarmala Programme, Bharatmala Pariyojana, National Infrastructure Pipeline, Regional Connectivity Scheme (Udan) and India Industrial Land Bank are some of the key initiatives transforming India’s logistics and infrastructure.
8. Technological advancements
India’s rapid digital transformation has also revolutionised business operations. With over 900 million12 internet users, India is the world’s second-largest online market. Growth in related sectors such as gaming, media and entertainment, e-commerce, fintech, education, MedTech and others are testament to the untapped potential of India’s digital economy. Moreover, the rising adoption of the Unified Payments Interface (UPI) is marking a digital payment revolution, asserting the nation’s adoption of technological advancements and its advantages for increased market access.
9. Export incentives
India also offers several export promotion schemes to encourage international trade and exports. The Remission of Duties and Taxes on Exported Products (RoDTEP), implemented in January 2021, attempts to repay taxes and tariffs incurred by exporters.13 Meanwhile, the Trade Infrastructure for Export (TIES)14 and the Market Access Initiatives (MAI)15 aim to boost exports and strengthen trade infrastructure. Promoting manufacturing in India, the Export Promotion Capital Goods (EPCG)16 Scheme facilitates the import of capital goods to produce quality goods and services.
10. FDI Reforms
The government has implemented an investor-friendly FDI policy—allowing most sectors, except certain strategically important ones—to be open to 100% Foreign Direct Investment (FDI) under the automatic route. FDI policy provisions have been progressively liberalised and simplified across various sectors such as pension, other financial services, asset reconstruction companies, broadcasting, pharmaceuticals, single brand retail trading, construction and development, power exchanges, e-commerce activities, coal mining, contract manufacturing, digital media and civil aviation. Recent reforms in the FDI policy have been undertaken in sectors, such as defence, insurance, petroleum and natural gas, telecom and space.
India is brimming with exceptional potential, which is ideal for foreign investors seeking to diversify their growth and investment portfolio. The nation’s upward economic growth trajectory, favourable demographic trends and supportive business environment present a unique opportunity for investors. To learn more about the various investment opportunities awaiting savvy investors in India, visit click here.
