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SINGAPORE: Analysts said companies dealing with basic consumers goods are poised to benefit from India's growing middle-class and rising consumer spending.
They said consumer spending will become even stronger when the Indian government's effort to boost rural growth gets underway.
Going forward, the country's focus on infrastructure development would present more investment opportunities for regional businesses.
India's infrastructure has been strained by its rapid economic and population growth.
Earlier this month, the Indian government rolled out a US$210 billion budget and has pledged to focus on infrastructure and development projects to spur the economy.
In April this year, plans for infrastructure development worth some US$500 billion over a period of five years were announced. About 100 projects from different sectors will be taken up under the plan.
However, with trade and fiscal deficits weighing on the shoulders of the government, analysts say the country must do more to attract foreign direct investments.
Robert Prior-Wandesforde, Co-Head, Asian Economics, Global Markets, HSBC, said: "The Indian government is extremely keen to invest more in infrastructure. The problem is, of course, it doesn't have a huge amount of money to do so.
"So it has to bring in private sector money and provide significant incentives to bring in private sector money. And that is the way, really, to create a much better infrastructure sector which is so vital to the success of the Indian economy."
Observers said there is also investment potential in India's manufacturing industry, in particular, its automotive sector. India's car market is one of the fastest growing markets in the world.
That is why Singapore's trade agency has urged businesses to look at India as a viable option for growth and expansion in the region.
Reginald Wee, regional director (South Asia), IE Singapore, said: "So basically, the Indians are now actively encouraging infrastructure investments - both their own as well as foreign - and also building the necessary infrastructure like roads, and the IT backbone, in order to make this happen.
"It has very good legal structure, good employees as well as knowing where the legal pitfalls are and having good multipliers, that's basically how companies navigate the system."
India's economy is expected to grow by about six per cent this year. With strong domestic demand, impacts from interest rate cuts and fiscal handouts to the rural areas, analysts are projecting India to record seven to eight per cent in Gross Domestic Product growth in 2010 and 2011. - CNA/vm
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