India on the Back foot- Perks suggested to improve Foreign Investment

It’s been a bad couple of months for the Indian business front. The Rupee has sunk to its lowest ever value against the might Dollar, a paltry 60.72 as of last Wednesday. There was a hue and cry about the Congress government’s bold FDI step last year and the general appearances are grim and sultry in the annals of Indian business. Maybe this was the cue for the Securities and Exchange Board of India (SEBI) to act as the silent messiah- choosing last Tuesday to suggest a massive overhaul of existing foreign investment regulations to encourage a surge of overseas investment in India. This move is expected to slow down the rapid withdrawal of foreign funds from the Indian capital markets by investors who compare the recovering US economy to the ailing Indian Rupee and decide to invest in other, more fruitful and safer markets.

SEBI has approved sweeping changes, including simplified and uniform entry norms for foreign investors, allowing startups and SMEs to list on stock exchanges without an initial public offering as well as proposing measures to help startups gather better visibility and fund raising capacity. This move from SEBI, favourable received by the Indian business community, aims to encourage direct foreign investment in India while also encouraging home grown entrepreneurs to better realise their plans. The existing foreign investor community in India has been duly acknowledged, while the usual red-tape that precedes the launching of a startup, or the formalities that succeed a startup’s product launch have been eased. Maybe now, India’s infinite entrepreneurial strength can rightfully come to the fore and work its wonders. At any rate, entrepreneurship in India gets a huge boost in the arm.

According to a scathing 2012 report from the US-based research firm, Genome, India is one of the toughest countries for a startup to flourish and be profitable. The biggest roadblock could possibly be the unavailability of reliable investors or any real effort from the Government to encourage the spirit of entrepreneurship. However, the current bleak financial scenario could be just the kick that gets the rusted system back into motion. It’s now upto the Indian startups to make the most of it!