Study On India

A Rising Super Power
With a population of 1.2 billion and a sub-continental area similar in size to that of the European Union, it is easy to understand why India is typically described as a land of contrasts. Six distinct religions make it both ethnically and religiously diverse; its caste system defines and divides social and political issues; extreme wealth and poverty wedges a gap inacademic opportunities (India has an extremely successful system of higher education, with almost 40 million graduates).

Yet despite its differences, India has emerged as one of the most promising markets in terms of maximum opportunity for growth among emerging market economies. Its per capita GDP of US$965 is a reflection of India´s shift to a more liberalized economy. Socialist policies,emphasized by firm control of main industries by the state, began to relax by the early 1990´s and the opening to foreign investors enabled India to re-launch its capital markets and allow Indian companies to raise funds overseas.
With a projected population growth of 1.4 billion, a surge of the middle class from 50 million to 600 million and rising as the fifth largest consumer market worldwide (all by2025), India has become the second most desirable target for overseas investors. The sectors that most attract foreign investment include Telecommunications, Drugs and pharmaceuticals, Construction and Fuels (power and oil refineries), amongst others. Investors recognize that India is a “Global Gateway” and by joining resources can make entry into Asian markets.
How exactly does one enter theIndian economy? Due diligence of the future company, knowledge of Indian concepts of HUF businesses, Guru and GenNext, and an understanding of India´s business etiquette (do establish a friendship relationship and express a desire to achieve a long-term win-win alliance: don´t ignore the hierarchy nor talk about caste, class or gender) will definitely ease entrance. Further, establishing a clear andconcise business entry plan will hopefully keep from having to resolve contractual disputes, which can be done by negotiation, mediation, arbitration or litigation.
India, however, is not all roses. Corruption is widespread due to political interferences, no staff training or incentives and an outdated infrastructure. Additionally negotiations are typically slower; as Indians need to buildpersonal relationships to reach an agreement, contracts take longer to sign and proposals are subjected to microscopic scrutiny. By studying several key factors such as Starting a Business, Getting Credit, Protecting Investors, and Trading Across Boarders, and by benchmarking its findings against regional and high income economies (OECD,) the World Bank ranks India 132 out of 183 economies as to theoverall "Ease of Doing Business.”
On its website, Doing Business, the Word Bank details the “bureaucratic and legal hurdles” that are associated with Starting a Business in India. A deeper look reveals the reason India lands in such poor standing compared to other small- to medium-sized domestic businesses in 183 economies. For example, twelve steps are required to even register a business --averaging 29 days compared to 23 in South Asia and 12 in OECD countries. Further, the costs to open a business, including all official fees and fees for legal or professional services total 46.8% of India´s income per capita; as opposed to 21.6% in South Asia and 4.7% in OECD countries. However, the most shocking figure comes from the capital an entrepreneur needs to deposit before registration andwithin three months after incorporation. In India 149.6% of the economy´s income per capita is required, compared to only 19.1% in South Asia and 14.1% in OECD countries.

Although it has moved up 18 spots in 2012, reaching a ranking of 147, India still holds many disadvantages in terms of the ease of Paying Taxes. Measuring all taxes and contributions that are government mandated and that...