India's economy is projected to become the third largest globally by 2030, driven by exponential growth across sectors such as technology, renewable energy and consumer goods.

The country has a population of more than 1.44 billion, which is digital-savvy, skilled and aspirational. One of the key factors making India an attractive investment destination is the government's focus on promoting innovation and making it easier to do business.

Invest India helps businesses explore and navigate India's vibrant investment landscape. We connect investors to the right opportunities for strong and sustainable growth. This article shares 10 reasons why India is a top choice for entrepreneurs and businesses today.
 

10 benefits of setting up a business in India

1. Growing consumer market

India's 65% of the population is under 35, making it the country with the largest young population.¹ These young consumers are driving demand for aspirational products, digital experiences and premium lifestyles. In fact, the young crowd, rising incomes, rapid urbanisation and a growing middle class are among the primary reasons that consumer spending in India is expected to reach $4.3 by 2030.² This growth is restructuring India's economy, creating strong demand across various sectors, including FMCG, digital services, housing and infrastructure.
 

2. Competitive talent pool

With over 62% of its population in the working-age group (15–59 years) and a majority of this group under 25 years old, India is a reservoir of skilled and aspirational young people.³ According to EY, India's working-age population-to-total population ratio is expected to be the highest of any large economy, at 68.9%, by 2030. It has the largest pool of English-speaking science, technology, engineering and mathematics (STEM) graduates, estimated to annually increase at two million, providing a competitive edge over other regions.⁴ Government programmes like Skill India, and Pradhan Mantri Kaushal Vikas Yojana are helping young people prepare for real-world jobs. This is enabling India to meet the needs of global industries and making the country more competitive in fields like technology, manufacturing, healthcare and renewable energy.
 

3. Business-friendly policy reforms

The government has been overhauling several existing policies and introducing transformative policy interventions to make India more business friendly. These reforms are focused on reducing the compliance burden to create a conducive business environment.

• The Goods and Services Tax (GST) has simplified taxes and reduced compliance costs, while the Insolvency and Bankruptcy Code (IBC)⁵ ensures faster debt resolution and financial stability
• As many as 42,377 compliances reduced (states and centre)⁶ and 3,400 legal provisions decriminalised⁷ to lower legal risk
• The National Single Window System (NSWS)⁸ offers single-window approvals for faster clearances
• India Investment Grid (IIG)⁹ provides easy access to infrastructure investment projects
• The PAN (Permanent Account Number) is the common identifier for all regulatory clearances
• These initiatives make it easier to start, operate and expand businesses in India.
   

4. Robust digital infrastructure

India leads in digital public infrastructure, which supports a fast-growing digital economy that contributed approximately 11.74% to GDP in FY 2022-23.¹⁰ By 2030, India's digital economy is projected to contribute nearly one-fifth of the country's overall economy.¹¹ Here are the key digital initiatives enabling this transformation:

• Aadhaar, UPI and DigiLocker¹² have simplified identity verification, real-time digital payments and secure document storage, reducing administrative burdens for businesses.
• BharatNet is expanding high-speed broadband connectivity to rural areas, creating new digital opportunities across the nation.
• With a rising number of internet users and strong government support, India's digital economy is set to reach $1 trillion by 2030,¹³ creating expansive opportunities for businesses to scale digitally.
   

5. Government support through flagship initiatives

The Government of India has launched several schemes to promote entrepreneurship and investment through flagship initiatives:

• Production-Linked Incentive (PLI) Schemes, with a ₹1.97 lakh crore outlay across 14 sectors, boost manufacturing and exports.¹⁴
• Make in India is strengthening India's global position as a manufacturing hub.
• Startup India supports over 1,70,000 DPIIT-recognised startups¹⁵, fostering innovation.
• Digital India aims to transform India into a digitally empowered society and knowledge economy.

These initiatives offer regulatory and financial incentives, encouraging major investments from companies across sectors, fostering innovation and enabling citizens to adopt digital innovations.
 

6. Strategic geographical location and robust supply chain

India's strategic location positions it as a natural hub for global trade, connecting it to South Asia, the Middle East and Southeast Asia by creating efficient trade routes. The country boasts a robust transport infrastructure that includes:

• Twelve major ports and over 200 non-major ports support India's growing maritime trade.¹⁶
• More than 150 operational airports, including 33 international airports, ensure fast global and domestic air cargo movement.¹⁷
• Indian Railways runs the fourth-largest railway network in the world, covering ~68,000 km. In 2023–24, it carried 4.35 million tonnes of freight daily, promoting trade supply chains.¹⁸

Deals like the CEPA and Free Trade Agreements (FTAs) have opened doors to new global markets for Indian businesses. Currently, the country has preferential access, economic cooperation and FTA with over 50 countries.¹⁹
 

7. Strong regulatory ecosystem

India has a robust, regulated financial system to safeguard the interests of both businesses and investors, including retail and institutional investors. Regulators such as the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) ensure stability of the system and protect investors' money. India has surpassed $1 trillion in cumulative foreign direct investment (FDI) inflows since 2000²⁰ — a landmark in the country's growth journey. In FY 2024-25 (till December), India recorded ~$16.65 billion in FDI inflows.²¹ Meanwhile, banking and fintech reforms are making it easier for businesses to access funds, enabling faster growth.
 

8. Cost-effective operations

Inputs costs such as labour, real estate and transport are relatively lower in India as compared to that in developed countries. It makes the country an ideal destination for setting up labour-intensive units in sectors such as textiles, automobiles, capital goods and others. Even in service-based industries like healthcare, IT and research and development, India is in a favourable position. It is home to 1,700 Global Capacity Centres (GCCs),²² one of the largest communities of healthcare professionals and a vast English-speaking employable talent which is not only cost-effective but also highly driven. Combined with increasing automation and supply chain reforms, this helps improve margins for businesses across sectors.
 

9. Thriving startup and innovation ecosystem

As the world's third-largest startup hub²³, India is spearheading a revolution in startups and promoting entrepreneurship. From quick commerce to drones for agri-tech, India's startup sector is packed with action. Numerous new businesses are emerging here due to the increased ease of starting ventures compared to the past. The government supports initiatives such as Startup India and the Fund of Funds for Startups (FFS), which provide funding, mentoring and simplified processes for new companies.²⁴ Some of the hotbeds for disruption include fintech, healthtech, edtech, agritech, clean energy, deep tech, AI and more. With 118 unicorns, India is earning investors' confidence by building, scaling and nurturing transformative ideas.²⁵ India also ranked 39th in the Global Innovation Index 2024, highlighting its crucial contribution to the global innovation ecosystem.²⁶
 

10. Commitment to sustainability and green growth

India's climate commitments and renewable energy growth offer strong ESG-aligned²⁷ business opportunities:

• India aims to reduce the emission intensity of GDP by 45% and deploy 50% of its cumulative electric power installed capacity from non-fossil fuel-based energy resources.²⁸
• As of December 2024, India's total renewable energy installed capacity reached 209.44 GW.²⁹
• The country plans to reach 500 GW of non-fossil fuel capacity by 2030, marking one of the largest green energy expansions in the world.³⁰
• Green hydrogen, electric mobility and energy storage are emerging as high-growth areas for sustainable business investments.

India is a strategic choice for any business looking to scale up and find new markets for growth. With a strong policy push, digital infrastructure and a future-ready workforce, it offers the right conditions to build, operate and expand.

Visit India Opportunity to start your growth journey today.