Why foreign investors are keen to invest money in Indian startups?
February 03, 2022
India is a growing nation that exhibits immense potential. The country has a comprehensive source of talented human resources and a massive market that gives it an edge over others when it comes to being evaluated as an investment. These factors combined make India one of the most attractive investments that anyone can make. Sumit Sharma of GoBOLT writes, betting on the potential for growth that this country has has produced substantial results for investors in the past.
As we develop further, the returns for investing in India are just multiplying, and consequently, so is the investment pool. According to a report published by Department of Promotion of Industry and Internal Trade, India attracted a massive inflow worth $67.54 bn in the form of FDIs in the short period from April to December 2020. Further, as per the United Nations Conference on Trade and Development&rsquo report the Indian economy is expected to grow at 6.7% in 2022, which will be the fastest in the world during the year. These facts clearly highlight the potential exhibited by India&rsquos economy and the trust of the investors in it.
Some reasons that might have contributed towards establishing such strong investor confidence in the country&rsquos potential are discussed as follows-
Feasible options for establishing business
India has always been more than welcome and accommodating of foreign investors. The Indian Government is working relentlessly to ease and incentivize foreign direct investment. These efforts have been fruitful, as highlighted in a recent report of World Bank that ranked countries basis their ease of doing business. India has performed considerably well and has consistently jumped spots. In the short span of five years, from 2015 to 2020, India has climbed a whopping 79 spots, which strongly highlights the dedication of the country towards making FDIs smooth and efficient.
Massive market size
India is the second-largest population in the world that is still growing substantially by the minute. Our population is one of our strongest attractions when it comes to investors. Since there is such a wide base of consumers in India, establishing a business here is a wise idea and thus appeals to the investors. Further, the strategic location of India allows it to feasibly tap into the markets of other neighboring countries as well. This has boosted the foreign investors&rsquo confidence in India&rsquos consumer market.
Potential to innovate
India is a hub of innovation and upgradation. The country climbed up 33 spots in the Global Innovation Index (GII) published by the World Intellectual Property Organization (WIPO) within five years, from 2015 to 2020. Additionally, India is also known to be a startup hotspot with an impressive number of unicorns under its wing. The Global Startup Ecosystem Report (GSER) of 2020 mentioned two Indian cities, Bangalore and Delhi, in its top 40 globally favored ecosystems to build successful international startups. This great potential exhibited by the country on the innovation front has earned it a favored spot in the eyes of foreign investors.
Summing Up
India is a country characterized by a wide consumer base, ability to innovate, and ease of doing business with. Naturally, these qualities are an extreme lure to Foreign direct investors looking to invest their money in countries with potential. India has historically provided massive returns to its happy and returning customers, which has made it an FDI hotspot. Some reasons that add to India's FDI allure are discussed above at length.  
 | Sumit Sharma is the co-founder of the tech-enabled E2E logistics firm GoBOLT |
The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Indian Transport & Logistics News
