During the 1960s and 1970s, India’s economy faced many challenges, growing only an average of 3–3.5 percent per year. Numerous obstacles hindered foreign companies from investing in India, and many restrictions on eco- nomic activity caused huge difficulties for Indian firms and a lack of interest among foreign investors. For many years the government had problems with implementing reform and overcoming bureaucratic and political divi- sions. Business activity has traditionally been undervalued in India; leisure is typically given more value than work.
Stemming from India’s colonial legacy, Indians are highly suspicious of foreign investors. Indeed, there have been a few well-publicized disputes between the Indian govern- ment and foreign investors. 3 More recently, however, many Western companies are finding an easier time doing business in India. 4 In 1991, political conditions had changed, many restrictions were eased, and economic reforms came into force. With more than 1 billion consumers, India has become an increas- ingly attractive market. 5 From 2003–2006, foreign invest- ment doubled to $6 billion. Imported goods have become a status symbol for the burgeoning middle class. 6 In 2008/09 FDI in India stood at $27.31 billion. 7 In
2009, India was the third highest recipient of FDI and was likely to continue to remain among the top five attractive destinations for international investors during the following two years, according to a United Nations Conference on Trade and Development (UNCTAD) report. 8 The 2009 sur- vey of the Japan Bank for International Cooperation con- ducted among Japanese investors continued to rank India as the second most promising country for overseas business operations, after China. According to the Minister of Com- merce and Industry, Mr. Anand Sharma, FDI equity inflows
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