Autonomy of different Indian states to woo international investors gives a major boost to industrialisation in the country and also promotes a healthy competition between them, a leading business strategist and entrepreneur has said.
A growing number of Indian states are attracting Foreign Direct Investment (FDI) as the Indian government has given the states a free hand in this regard.
Under current rules, only very large foreign investments in some restricted sectors and multi-billion-dollar projects requires the Indian governments' approval.
Clearly Indian states now have most of the authority to attract investors which makes them reasonably autonomous. New Delhi, in a way, has decentralised FDI processes - very similar to what they have for provinces in China, Girija Pande, Chairman of Singapore-based Apex Avlon Consulting Pte Ltd, told PTI on Thursday.
He was speaking on the sidelines of a high-level investment seminar here on the role of Indian states hosted by the Confederation of Indian Industry and the Indian High Commission.
There is now a very healthy competition amongst states to attract investments which is excellent as it improves all, he added.
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Foreign investors remain bullish on India with its improving economy, backed by the central government's recent reforms like the Goods and Services Tax which has improved transparency and ease of doing business," Pande said.
Given the country's attractive growth trajectory of 7 per cent per annum in Gross Domestic Product (GDP), foreign investors are responding favourably to recent policy reforms, he added.
Pande said that investors favour India for its strong consumer-driven domestic demand as well as huge export potential.
He also noted that most of the states were now seeking ease of doing business ranking in their respective jurisdiction from international agencies.