India

One estimate of the economic cost of the tsunami disaster to India is that the tidal wave obliterated $6.5bn worth of productive capacity and infrastructure. The authorities have been quick to point out they can respond effectively to the task of reconstruction, and some economists even predict that rapid reinvestment could mean that the net economic impact of the disaster is positive.

Apart from the disaster, India remains attractive to investors. The domestic market alone comprises as many as 300 million consumers and offers easy access to the entire south-east Asia region. Although India lags behind China in attracting FDI, a recent World Bank report revealed that India was better placed to attract investment, having addressed particular bureaucratic obstacles and tackled the problem of under-investment in infrastructure.

The government welcomes foreign investment, with policies designed to ease entry, location decisions, and choice of technology, production, import and export. No income tax is levied on profits arising from exports. Investors are also attracted to India by its rich mineral and agricultural resources. The country boasts a well-established major manufacturing sector that encompasses almost all areas of activity. On hand is a huge pool of skilled workers and professional managers; wage levels are competitive.

India has a substantial experience of free market economics, and investors will find a sophisticated financial sector and vibrant capital market that boasts over 9000 listed companies.