Global private equity funds have focused on Indian companies as potential buyout opportunities, with the IT sector and exporters among the most favoured. Reasons for this are captured by Goldman Sachs' October Asian Economic Analyst: Assuming policy reforms remain on track, total exports from India will reach US$1.1trillion to US$1.4trillion by 2015, about seven to nine times the 2005 outcome; India possesses the greatest potential to 'do another China' or to become a disinflationary force in the global economy; and Real GDP growth has averaged more than 8 per cent year-on-year in financial years 2004-2006, putting India second only to China in the regional 'growth derby' and signs point to a further acceleration. So what sectors should a private equity investor pick? Emulating China's success, Goldman says, India has enacted additional incentives to investments in Special Economic Zones (SEZs) this year to encourage export-oriented foreign direct investment. 'These new laws ensure that SEZs act as tariff enclaves for export-oriented manufacturing and services, and also offer corporate income tax benefits and simplified procedures for FDI in the SEZs, which have recently attracted greater interest from domestic and foreign investors.' SEZs are expected to play an important role in attracting FDI and generating employment, adds Goldman, pointing out that India's commerce ministry is planning to attract more than US$5billion worth of FDI in the SEZs by the end of next year - equivalent to about 65 per cent of the annual inward FDI India received in the 2006 financial year.