India » Market Report

India’s Market with a GDP growth rate of 9% is emerging as the fastest growing economies from the third world countries. It is believed that in the near future, it will be competing with the economic giants like Japan and America, and in the next 40 years it will emerge as the most powerful Economy of the world. India’s economy is a blend of diversified sectors, all contributing alike to India’s rapid economic growth. The major sectors which are playing the role of catalyst in India’s economic boom are agriculture, textiles, chemicals, detergents, travel, tourism and real estate.
   
India’s economic data of the last two years shows signs of a really promising future. The overall GDP growth in the year 2007 was recorded as 9.2%.  There was an increase of 3% in industrial growth in 2007 as compared to the previous year (2006).  The stats of year 2007(in comparison with 2006), given below demonstrate the promising state of India’s economy.

• A GDP growth of 9.2%
• A 3% increase in the industrial sector.
• Increase in exports by 23.88%
• Increase in imports by 29.3%
• A growth rate of 1% on the broad money.
• An 8.6% increase in the core infrastructure sector.

India is a largely populated country with a large population of the country living under the poverty line. But the last two decades have been the brightest era in the Indian Economic history. India, after getting independence from British colonizers followed a largely socialist approach, which discouraged the private sector, foreign trade and foreign direct investment in the country. In return, it blocked the path to India’s Economic Growth. The laws were so strict that it was almost next to impossible for a foreigner to make economic transactions of any sort, which included possession of any immovable property and transfer of profits of any sort out of country.

The realization on the part of government led to the relaxation of the laws regarding foreign direct investment in the country in the year 1991. Various reforms were carried in the post 1991 era which includes;

• Development of Special economic Zones (SEZ) with special incentives for investors, such as exemption on various export, import duties, value added taxes, income taxes etc.
• Formation of a Foreign Investment Implementation authority (FIIA), which directly deals with regulating and facilitating the foreign direct investment in the country.
• Special laws pertaining to the development of private sector in the country.
• Foreigners residing in India were given the laws to buy, sell or possess immovable property without any permission from Reserve Bank of India (RBI).
• NRI’s (Non-resident Indians), were given almost the same rights for their monetary transactions as the Indian residents.
• Foreign investors were given the rights to purchase, sell, buy and made transactions in a hassle-free environment.

Indian economy flourished under the new rules and regulations. The India became a heaven for the foreign investors. India became their first choice to invest because of the new laws, vastly English speaking population with educated youth in IT and other developing sectors. Many leading companies outsourced their call centers and technical support centers in India because of the availability of English speaking employees, ready to work at far less pay than their western counterparts.

India is blessed with a diverse geographical location, rich with culture and history. It has everything from Himalayan mountain ranges to beautiful beach resorts. Goa, Shimla, Darjeeling and numerous other places has been dream resorts for people from all over the world. But the notorious Indian laws prevented the foreigners to possess immovable property in India. The post 1991 laws, opened a gateway for foreign investors, both individual and companies to flock to Goa and such other resorts. The English individuals wishing to own private homes in resorts flocked towards Goa and other resorts of India because it was quite affordable in India. It is possible to live in comfort and luxury in such resorts at only 500 pounds/ month as compared to higher cost of living in England. A very luxurious life style can be catered only in 5000-7000 pounds with all the facilities ranging from living, transport to other basic facilities.       

International property brokers forecasts the outlook for the Indian real estate as bullish. The sector has immense potential and can bring an average annual growth rate of 25-30% till 2010. Some areas like Mumbai Property, Pune Property and Bangalore Property may do even better than what is predicted. There will be an increased investment as UK investors are also showing keen interest. Financial powerhouse Merrill Lynch forecast that the Indian property market will increase by over 700% between 2008 and 2015, offering the potential for large property gains for those brave enough to take the plunge.