The Foreign Private Investment Climate in India

by Anant Negandhi



The article analyzes conditions of investment in India and the viewpoint of foreign investors in that country. In recent years the role and potential of private foreign investment in promoting economic development in less-developed countries have received considerable attention. In any developing country where huge investment outlays are made, prices of some commodities are bound to rise due to the natural lag between demand and supply. However, it is the general wholesale price level which needs to be stabilized. In this regard, India has maintained a remarkable stability as compared to many developing countries. A United Nations study of currency depreciation shows that the Indian rupee depreciated from an index of 100 in 1952 to 79 in 1962. This compares very favorably with Great Britain's pound which depreciated from an index of 100 to 75 during the same period. For specific investment opportunities, the government of India periodically publishes an illustrative list of industries where private foreign capital is needed. Iron and steel, castings and forgings, iron and steel pipes, special steels, nonferrous metals and alloys, boilers and steam generating plants, are some of the few.

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