The most important success factors in India are time, time and time. 3 success factors that are difficult for Europeans and especially Germans to bear. The other success factors are respect for the people of India and love for them and for the country.
3.1 Foreign Direct Investment (FDI)
Among the countries with the largest gross domestic product (GDP), India ranked seventh in 2018 with approximately USD 2.85 billion (US around USD 20.41 billion, Germany USD 4.2 billion).
More recently, India has become the focus of Foreign Direct Investment (FDI) and foreign institutional investors (FII).
Investments were made mainly in the service sector, it, construction, telecommunications and the automotive industry. The largest German direct investors in India include Siemens, Daimler, Volkswagen Bosch and MAN in the technology and automotive sectors.
Its size and growth potential make India an attractive market. India’s economy is currently growing at about 7 percent. The strongest argument for investing in India, however, is the high return on investment (ROI). India’s free market economy, the legal and legal framework conditions reward free entrepreneurship and risk-taking. Natural resources and generally well-trained staff could make India a bold but feasible choice, especially for medium-sized investors. Unfortunately, however, this is only partially true. For although India’s Prime Minister Narendra Modi is focusing on “the economy,” even though he wants to digitize India (on Twitter he has 30 million followers, US President Trump has 53.1 million for comparison), even though he is aggressively courting foreign investors, the reality on the ground is sometimes drastically different.
To be good, Modi is pushing for economic reform. The bureaucratic-heavy Foreign Investment Promotion Board, which reviewed and approved FDI applications, was abolished and replaced with a simpler – but still not simple – approval process. In addition, Modi enforced a uniform VAT for India, the Goods and Services Tax (GST), for the first time in 2017. Businesses and the Indian economy benefited from the GST. The International Monetary Fund (IMF) also achieves a positive overall result in its country report of 6.8.2018, although the introduction and the associated transitional difficulties at the beginning of the second half of 2017 initially led to a slump in growth. In the medium, however, economic growth has picked up again. However, the still large number of tax rates and the complex procedural structure are to be viewed critically.
The currency in India is the rupee (INR). In India, the rupee is usually written “Rupee” (Re), plural: “Rupees” (Rs). The (large) counting units are “Lakh” (1 lakh = 100,000) and “Crore” (1 crore = 100 lakh = 10,000,000). Our unit of 1 million is usually not understood, it is 10 lakh – also in conversation with internationally experienced bankers or businessmen.
3.3 Political environment and corruption
India’s fast-growing market economy is based on a dynamic and robust system. In theory, democracy and the separation of powers ensure a stable political environment and guarantee the rule of law. In fact, corruption is a widespread phenomenon. For example, an extra “fee” will be charged for each form required. The police also use “corruption price lists” for offences, with the “foreigner surcharge” sometimes significant.
In another survey, Transparency International measures the willingness with which nationals abroad pay bribes and kickbacks. With 7.5 points out of a maximum of 10, Indian companies came in 20th out of a total of 28 leading economies surveyed.
3.4 Robust legal and business system
India is a free market economy with a robust and well-developed legal and strong administrative system, the latter largely responsible for india’s high degree of bureaucratization. The Indian court system, like in Germany, is three-tiered in the supreme court, the Supreme Court, whose rulings are precedents that bind all other courts, including high courts and district courts. Indian courts are by law independent of the executive. Furthermore, as in Germany, the decisions of first or second instances can be appealed.
In principle, patience is required in court proceedings in India, because the courts and the judges are already so chronically overburdened at first instance that a trial period of ten years or more must already be expected here.