India is one of the fastest growing economies in the world and has emerged as a key destination for the foreign investors in the recent years. Economic reforms initiated in 1991 have grown in scope and scale and yielded increasingly salutary dividends. One of them is the steady improvement in India’s relative position in the global economy, reflected in New Delhi’s growing influence in international institutions (G-8, G-20) and negotiating free trade areas (with ASEAN, EU). Another is the improved efficiency in the economy and adoption of international “best practices” in the production of a range of goods and services. A third outcome is India ranking amongst the top ten investment destinations since 2007-09, attracting US $ 190 billion in FDI and Net US $ 108 billion in FII over the past 5 years.
Trends in India’s Foreign Direct Investment (FDI) are an endorsement of its status as a preferred investment destination amongst global investors. India’s competitive strengths span telecommunications, information technologies, auto components, chemicals, apparels, pharmaceuticals and jewellery.
India’s steady economic liberalization and its embrace of the global economy have been key factors in attracting FDI. The government recently opened up multi-brand retail, civil aviation markets, defense devices, insurance and medical devices and with more reforms expected in banking and pension sectors and land acquisition among others.
Depending upon the needs of the business, a foreign company can choose between various options stated below under the FDI guidelines.
Options for setting up business in India:
| Structure type | Purpose | Pros | Cons |
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| Liaison Office |
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| Project Office |
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| Branch Office |
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| Wholly Owned Subsidiary |
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