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How to Invest in India Campaign Escalated

Invest in India

How to Invest in India Campaign Escalated

How big is Invest in India Plan 2030

Over the decades, India has emerged as one of the world’s fastest-growing economies and investment hubs (invest in India program) an appealing investment destination, owing to economic reforms and a large consumer base. According to preliminary GDP estimates for the second quarter of 2021-22, India’s gross domestic product (GDP) at current prices was Rs. 55.54 lakh crore (US$ 743.34 billion) in the second quarter of FY22.

India has the largest FinTech acceptance rate in the world, at 87 per cent, substantially higher than the world average of 64 per cent.

Energy, transportation, irrigation, finance, communication, education, and health are the seven major infrastructure factors that are most important in accelerating the pace of economic development in a country like India. The first five are for economic infrastructure, while the last two are for social infrastructure. India has the world’s second-largest road network, spanning over 6.38 million kilometres (km).

India is the third in the world producer and exporter of electricity, with 1,557 terawatt-hours (TWh) generated in 2020. India had an installed power power-generation capacity of 393,389 MW as of December 2021, with central utilities contributing 98,547 MW, state utilities contributing 104,384 MW, and private utilities contributing 190,459 MW.

The Indian banking system includes 12 public sector banks, 21 private sector banks, 44 foreign banks, 43 regional rural banks, approximately 1,474 urban cooperative banks, and 97,006 rural cooperative banks, as well as cooperative institutions. The volume of Transactions in India increased to 2.11 lakh in December 2021, up from 2.08 lakh in December 2020.

“Invest in India” slogan flooded with huge investments in few years due to new Governemnt policies and programs

According to the Reserve Bank of India, the total number of debit cards in circulation in December 2021 was 937.74 million, while credit cards were 68.95 million. This expansion has been facilitated by a number of factors, including a well-developed financial system, the need for infrastructure, and proactive government initiatives. The country’s growth has been influenced by both domestic and foreign investment.

Invest in India Program Success

Recent Happenings/Investments: The following are some recent investments and developments in this space:

  • India’s foreign exchange reserves increased to US$ 634.28 billion as of January 21, 2022.
  • In December 2021, private equity (PE) and venture capital (VC) investments totaled US$ 4.4 billion across 99 transactions. The largest deal in December 2021 was a US$ 500 million debt financing of a solar plant in Tamil Nadu by the US International Development Finance Corporation (DFC).
  • In 2021, private equity and venture capital firms will invest in India around US$ 77 billion across 1,266 transactions in India, a 62 percent increase over last year’s US$ 47.6 billion across 923 transactions.
  • M&A deals worth US$ 90.4 billion were signed/completed in the first nine months of 2021, a three-year high.
  • The pension fund investment board of Canada invested Rs. 1,200 crore (US$ 160.49 million) as an anchor investor in the initial public offerings of several Indian companies, including One 97 communication (Paytm), Zomato, FSN E-Commerce Ventures (Nyaaka), and PB Fintech.
  • In 2021, 2,250 new startups were founded in India, raising a total of US$ 24.1 billion.
  • ArcelorMittal Nippon Steel India (AMNS India), which owns a steel mill in Hazira, Surat, will invest in India around Rs. 166,000 crore (US$ 22.20 billion) in six projects in Gujarat, creating 1.8 lakh jobs.
  • The Adani Group intends to invest in India up to Rs 4,646 crore (US$ 621.36 million) in two data centre projects in Uttar Pradesh.
  • According to Economic Survey 2022, the production-linked incentive (PLI) scheme will result in new investment in the textile sector of Rs. 19,000 crore (US$ 2.54 billion) over the next five years.
  • The Cabinet Committee on Economic Affairs (CCEA) approved an Rs. 12,031 crore (US$ 1.6 billion) plan in January 2022 to build infrastructure to transmit electricity generated by renewable energy projects in order to increase output from green energy sources.
  • Reliance Industries announced a $75 billion investment in renewable infrastructure, including power plants, solar panels, and electrolyzers, with the goal of converting all of that clean power into hydrogen.
  • The Production Linked Incentive (PLI) Scheme for national speciality industrial production will result in an increase in capacity of 25 million tonnes, additional investments of approximately Rs. 40,000 crore (US$ 5.34 billion), and the creation of 5.25 lakh jobs.

Invest in India Industry Scenario

Over the last few years, the Fintech segment in India has seen an exponential increase in funding; investments worth more than $8 billion have already been witnessed across various stages of investment in 2021. While the Payments and Alternative Finance segments accounted for more than 90% of the sector’s investment flows in 2015, there has been a significant shift toward a more equitable distribution of investment across sectors in the years since, including InsurTechs, WealthTechs, and so on.

Over 17 Fintechs in India have achieved ‘Unicorn Status’ with Invest in India Program

India has seen tremendous growth in digital payments, with a monthly volume of over 5.7 billion transactions worth $2 trillion (Total Digital Payments) in September of this year. With 25.5 billion real-time online payments transactions in 2020, India outnumbers the United States, United Kingdom, and China combined.

The Fintech revolution in India is the result of years of hard work laying the groundwork for key enablers through important initiatives such as:

  • Jan Dhan Yojana: The world’s largest financial inclusion initiative, “Jan Dhan Yojana,” has assisted in the enrollment of over 435 million beneficiaries in new bank accounts for direct benefits transfer and access to a variety of financial services applications such as remittances, credit, insurance, and pensions, allowing FinTech players to build technology products to penetrate India’s large consumer-base.
  • Financial Literacy: Some recent initiatives to improve financial literacy in India include the establishment of the National Centre for Financial Education and the implementation of the RBI’s Centre for Financial Literacy project. These steps are intended to promote financial education for all segments of the Indian population.
  • E-RUPI: An e-RUPI is a person and purpose-specific digital payments instrument that enables contactless and cashless payment solutions and will play a critical role in making Direct Benefits Transfer more seamless and effective. The solution for cashless payments for Covid-19 vaccination is being implemented.
  • IndiaStack is a set of APIs that enables governments, businesses, startups, and developers to use a unique digital infrastructure to solve India’s hard problems of presence-less, paperless, and cashless service delivery. The India Stack has been the driving force behind Fintechs’ rapid evolution. It is one of the most significant digital initiatives undertaken globally, with the goal of establishing a public digital infrastructure based on open APIs to promote public and private digital initiatives, and has served as a catalyst in India’s digital transformation.

Invest in India – A global FinTech Superpower

India has the highest rate of FinTech adoption in the world all because of Invest in India campaign

India is one of the world’s fastest-growing Fintech markets. Over 67 per cent of the 2,100+ FinTechs in India, today were founded in the last five years. The Indian FinTech industry was valued at $ 50-60 billion in FY20 and is expected to grow to $ 150 billion by 2025. 

The valuation of Financial technology transactions is expected to grow at a CAGR of 20% from US$ 66 billion in 2019 to US$ 138 billion in 2023.

Payments, Lending, Wealth Technology (WealthTech), Personal Finance Management, Insurance Technology (InsurTech), Regulation Technology (RegTech), and other subsegments comprise the Indian Fintech industry ecosystem. In India, the Fintech sector has received a total of $27.6 billion in funding.

As of October 2021, India’s Unified Payments Interface (UPI) had 261 banks participating and had recorded 4.21 billion monthly transactions worth more than $100 billion.

There are 1,860 startups in the Fintech sector. By December 2021, India will have over 17 Fintech companies that have achieved ‘Unicorn Status,’ with a valuation of more than $1 billion.

Road to Invest in India Plan 2030

India is now recognised as one of the world’s most important economic players. The country is rapidly expanding and is expected to have a $5 trillion economy by 2025. Finance Minister Nirmala Sitharaman’s presentation of the Union Budget on February 1st highlighted the policies and investment incentives to look forward to in the coming year:

  • The Union Budget 2022-23 includes a capital expenditure outlay of Rs. 750,000 crore (US$ 100 billion), a 35.4 per cent increase from Rs. 554,000 crore (US$ 74.09 billion) in 2021-22.
  • Increased government investment is expected to attract private investment, along with significant support from the government’s key Production-linked Incentive Scheme (PLI). The PLI scheme in 14 different sectors has the potential to generate an additional Rs. 30 lakh crore (US$ 401 billion) in output over the next five years, as well as create 60 lakh jobs.
  • Furthermore, in order to assist India is moving toward a more sustainable economy, the PLI scheme allocates Rs. 19,500 crore (US$ 2.6 billion) for the manufacturing of high-efficiency solar modules in order to meet India’s goal of 280 GW of installed solar power by 2030.
  • The Reserve Bank of India (RBI) will launch the Central Bank Digital Currency (CBDC) as India’s official digital rupee in order to boost the country’s digital economy.
  • According to the Union Budget 2022-23, India’s economic growth in 2022-23 will be 9.2 per cent, the highest among large economies. The government’s ongoing efforts to increase vaccination coverage among citizens are supporting the economic recovery’s growth.
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