Cover:Serum Institute Burj Khalifa - Elevator World India

Readers’ Platform
Pitch for Entry into the Indian Elevator Industry
by Jayashri Murali and S.C. Sharada
Jayashri Murali and S.C.
Sharada are co-founders
of Lex Valorem India Pvt.
Ltd., a corporate consulting
company that provides
business advisory and legal
services to Indian and foreign
entities across multiple
sectors during their various
growth stages. Some of their
expertise and focus lies in
“India Entry Services.”
Murali may be contacted
at e-mail: jayashri_m@
airtelmail.in, and Sharada
may be contacted at e-mail:
sharada.sc@lexvalorem
.com.
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ELEVATOR WORLD India • 4th Quarter 2010 •
The government of India has liberalized
investment opportunities by
foreign entities wherever situated.
Given the globalized and the liberalized
scenario, India is providing oppor -
tunities for business collaborations,
technology transfers, joint ventures
and other such commercial ventures
in the country across varying sectors.
During the peak of the global recession,
India provided the business
opportunity and stability to various
multinational companies to lessen the
impact of the recession and overcome
it without much adverse impact on
their business ventures in India. It
is no wonder, then, that India is elevated
as a nation “exporting hope”!
Infrastructure Sector in India
India’s low spending on such infrastructure
as power, construction,
transportation, telecommunications
and real estate, at US$31 billion (6%)
of its gross domestic product (GDP)
in 2002, had prevented India from
sustaining higher growth rates. This
has prompted the government to partially
open infrastructure to the private
sector, allowing foreign investment,
which has helped in a sustained
growth rate of close to 9% in recent
years. The government’s next five-year
plan, starting in 2013, looks set to include
US$1 trillion for infrastructure
development, with around half of this
likely to come from private funds.
Economists predict that by 2020,
Year % of GDP
2008 5.98
2009 6.53
2010 7.25
2011 8.19
2012 9.34
Table 1: Investment as a percentage of GDP in
infrastructure in India
India will be among the leading
economies of the world. Tables 1-2
and Figures 1-2 give a bird’s-eye view
of infrastructure growth.
It is evident from these tables and
figures that investment in the infrastructure
sector is growing steadily,
both in absolute terms, as well as a
factor of India’s GDP. With high-rise
buildings dotting the skylines all
over – be it residential apartments or
commercial complexes – malls and
airports in major cities, modernized
hospitals and educational institutions,
in addition to talk of state-of-the-art
manufacturing units and service
companies coming up rapidly, the
need for elevators conforming to
international standards of quality,
design and safety is increasing in
India. This calls for both techno -
logical and financial collaboration
with foreign entities by players in the
Indian elevator industry.
This article attempts to articulate, in
simple terms, the various India entry
routes available to foreign entities
planning to commence business operations
in India.
Regulatory Environment
Investment in India by foreign entities
is governed by the provisions of
the 1999 Foreign Exchange Management
Act (FEMA) and the rules and
the regulations formulated by the
Apex Bank and Reserve Bank of
Year Amount (billions of US$;
US$1 = INR44)
2008 67.57
2009 80.39
2010 97.32
2011 119.78
2012 148.98
Table 2: Investment in infrastructure