In the past few years, FDI has increased at a robust rate of growth, and it has been seen that FDI in developing nations has been substantial, to the extent that it has been acknowledging as an engine of growth for these nations. It has also been seen as a barometer of the world’s confidence in a nation's future. In countries like India, a comprehensive set of laws have been formulated to facilitate FDI in various sectors. Several companies with a global footprint have already set up base in India, and much more are in the process of doing so, attracted by a holistic approach to policy-making by the government and the huge largely untapped market of one billion strong individuals.FDI in India continues to face some problems.• Bureaucracy and red tape.• Lack of stability in the central government, and therefore a slow down of reform and policy-making. • Infrastructure: Availability of basic infrastructural needs for any project, like power, water and access are not consistent, and infrastructure often needs to be developed at the project promoter’s cost.• Rampant corruption, despite government policies to streamline and speed up procedures, including single-window clearance.• Commercial Law and Government regulations: Indian company law has undergone a number of significant changes in 1999, supposedly paving for smoother inflow of FDI. The Companies (Amendment) Act of 1999 allowed Indian companies for the first time to buy back their shares and substantially relaxed the restrictions on inter-corporate loans and investments.• Multiple taxes: India has a complex tax structure that varies from state to state, resulting in double taxation at times. Sectors like hospitality are taxed at 35% as against 10-15% in other countries in the Asia-Pacific region.FDI for the hospitality sector in India has been a profitable venture for all comers, with the sector currently suffering from a shortfall of 130000 rooms.
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