Learn About Potential Risks
As one of the world’s fastest-growing economies, India offers plenty of opportunities for investors. However, when investing in any country, it's important to research the potential risks involved. Understanding these factors will not only help you make informed decisions but will also position you to navigate challenges effectively.
Risk Management
Potential Risks
One factor to consider when investing in India is the possibility of experiencing natural disasters. India ranks in the top 10 countries when it comes to experiencing natural disasters, due to their large stretch of coastline. Another factor to research before investing in India is the chance for unpredictable trade regulations and tariffs​. India's government often implements protectionist trade policies, which could make it difficult for companies needing to import goods to India. One more risk to consider is India's massive, fragmented market. There are 28 states in India, speaking 22 official languages and 122 major languages, cultural differences, and economic differences that all need to be accounted for when making an investment in India.
Mitigating Risk
India is seeking to attract foreign investment by implementing policies that simplify the investment process for international investors. Although India is still somewhat behind other similarly sized nations regarding their regulations and restrictions on Foreign Direct Investment (FDI), they are working to create a more investor-friendly environment. Notably, India ranked among the top 10 countries for improvements regarding ease of doing business, according to the 2020 Doing Business study.