Doing Business in India For Dummies®

Understanding the Investment Routes

You can make a business entry into India in various ways. Some routes are still closed to traffic, while others are only partially open, but for the most part, it’s a clear road ahead.

In this section, you first look at those areas that are out of bounds, and then those that have been opened up only in part, so you know your limits. From there, consider the avenues by which the government of India permits overseas investment and see how the world has taken up its offer.

Exploring your options for investment

Generally speaking, overseas investment is permitted in virtually every sector. Exceptions are those areas that the government views as being of strategic, political, or religious concern. (Sorry, risqué magazines can’t be sold in India, so that’s one route I don’t explore here.) Here are some other sectors you can regard as investment no-no’s:

✓	Atomic energy
✓	Arms and ammunition
✓	Railway transport
✓	Mining of certain materials including iron, manganese, chrome, gypsum, gold, diamonds, copper and zinc

India wants to keep the control of these vital and sensitive industries in-house because of concerns regarding internal security and sovereignty. However, the investment blocks are few and far between. India permits 100 percent foreign equity in most industries. But sector-specific caps on foreign equity do exist in some industries. The Indian ...