Investing in India

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The WSJ reports that UK's Prime Minister David Cameron is pushing for India to lower its barriers to investment:

"We want you to reduce the barriers to foreign investment in banking, insurance, defense manufacturing and legal services, and reap the benefits," he said during a speech in the southern Indian city of Bangalore. Foreign investment in those areas is strictly limited or prohibited in India now.

Thanks to the recently launched Investing Across Borders (IAB) database, we can get a precise idea of what kind of restrictions India has on FDI in various sectors and how this compares to other countries in the region. As Cameron pointed out, India is quite closed to foreign investment in its insurance sector, scoring only 26 out of 100 according to IAB. (A score of 100 means the economy is completely open to FDI; a score of 0 means completely closed.) Banking is not nearly as closed, however. India scores 87, compared to a regional average of 87.2. 

For its part, the UK is almost completely open to FDI in all sectors -- with the exception of light manufacturing, with a score of 65. India is actually more open than the UK in this sector.  


Ryan Hahn

Operations Officer

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