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| Business Location |
Deciding where to locate the business involves several considerations, including the overall business climate and investor friendliness of the state or region. A comparison of various cities and states on a range of investment attractiveness parameters appears in this section. A ranking of several Indian states appears at the end of this section.
Industrial Locations
Locating manufacturing activities often attract local zoning regulations, and in many cases, restrict industrial activities in areas allotted by the state’s Industrial Development Corporation, according to a master plan for the state. Quite often, these areas are outside the urban limits of cities, and lack in modern business infrastructure. It is common for businesses to be headquartered in a city, with manufacturing operations within driving distance from the city.
At times, industrial land may not be readily available to meet the specific requirements of investors, in which case agriculture or other land needs to be converted for industrial use. This involves a complicated process of converting land use, and can take some months.
Special Economic Zones
Investors setting up export-oriented projects also have options of locating their businesses in the many Special Economic Zones coming up all over India. As on date, more than 250 SEZs have been approved by the government, of which several are in various stages of development. Many of these are dedicated zones for specific sectors like IT, electronic hardware, etc, while others are general-purpose, multi sector zones.
Commercial locations
A boom in construction sector and the rising levels of foreign direct investment are changing the skyline all over India. A rising demand for large and international quality office premises especially in metros has also resulted in the development of planned satellite townships at the outskirts of cities, offering buildings with huge spaces, incorporating the latest designs and construction materials. Many large and high profile foreign companies prefer to have their headquarters in these upcoming satellite towns and cities. Several international realty agents have set up their India businesses and advise their global clients on location selection for their Indian operations.
Considerations
Property rentals for commercial office space range from Rs 60 to Rs 300 (Euro 1 to Euro 5) per sq.ft depending on the location. Purchase rates range from Rs 4,000 (Euro 68) per sq ft to more than 20,000 (Euro 340) per sq ft in cities like Delhi and Mumbai. Purchases attract stamp duties of between 5% and 12%, depending on the local state laws, and property taxes of about 2% of the assessable value. There is a sizeable cash component in transactions in some cities (notably Delhi), which artificially reduce the transaction value, to avoid income tax clearances and also stamp duties. |
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ICREON