With the new open door policy, investment in India has become a popular choice, giving China a fair fight for the share of global investments. India, however, is less aggressive and a more conservative country compared to many other developing countries in Asia particularly China.



Before 1991, India's government had in place red tapes and taxes that discouraged outside interference in their economy and growth. Fearing for the local industries, the Indian government protected its weak economy by putting in place a big tax percentage on imported materials and discouraging attempts by foreign investors when they showed an interest in dabbling in promising companies in India. If they were to grow, India wanted it to be from their own effort and not from the fact that anyone helped them to achieve the success. Therefore, investment in India was difficult before 1991.

But the country is completely different today because it plays a big role in general meetings all around the world that dealt with world economy via the World Trade Organization. India is an active and founding member of the General Agreement on Tariffs and Trade (GATT). As India's economy starts to embrace more open door policy and relax its foreign investment policies,more parties will see the investment opportunities in India.

With China, we know that manpower is the main pulling point. The same goes for India. India is one of the countries in the world that provided a cost-effective labor force and an abundance or raw material, mostly textile related. As to how important the textile industry is to India, we can only say that $36 billion yearly share and value is a whole lot to a developing country. Investment in India's textile industry is a sound investment deal as it contributes up to be about 5% of its GDP!

India's labor-intensive market is highly-trained and attracts many foreign investments. Granted, many low-income groups of Indians are home-trained in it, as an India investor, it is best to take note of this fact. Every country has its own expertise and skills. India is a country with a healthy number of people capable of ruling the textile industry in Asia...the only other Asian country running alongside it in the textile industry and fighting for the same slice of the market is China.

While both countries fight for the lion share of the industry, the fierce competition between China and India will only benefit foreign investors in India's textile industry.

Copyright (c) 2008 Paul Hata