Survey reflects investors confidence in the Indian market.
Foreign investors see India as a vast and diverse up-and-coming market with plans to increase investments there over the near to medium term, boosting its ranking to eight position on the Global Foreign Direct Investment (FDI) Index, one point up on the year.
Thirty-one of the respondents to the index survey said they were more optimistic about India’s economic outlook over the next three years, compared to a year ago.
Investor confidence in India has been growing steadily over the last two years making it one of the top two emerging market performers on the FDI Index, said the UK-based A.T. Kearney which released the index on 18 April 2017.
The index highlighted India’s unique advantage, saying Prime Minister Narendra Modi-led government has made significant moves to bring in reforms that enable a ‘transparent’ and an ‘easy’ business environment, making it an attractive destination for foreign companies.
“Investors see India as a vast and diverse up-and-coming market with plans to increase investments there over the near to medium term. Reform efforts by the current government have improved the country’s investment environment. This includes the national goods and service tax (GST) reform, the largest non-direct tax reform in India in recent years,” said Vikas Kaushal, Partner and Head of India at A.T. Kearney.
Among the investors surveyed for this year’s Index, more than half said a successful GST implementation would cause them to significantly or moderately increase their investment in India.
More broadly, 70 percent of the respondents plan to maintain or increase their FDI in India in the coming years. India attracted the highest amount of announced greenfield investments in 2016, based on capex, for the second year in a row, with notable gains in manufacturing
India’s government is considering further policy reforms to further boost FDI inflows. A proposal to loosen FDI regulations on the retail sector is being evaluated, in part to support Prime Minister Narendra Modi’s “Make in India” initiative and bolster the manufacturing industry.
The government is also eliminating the need for FDI approvals in sectors where licenses are also required, such as defense, telecommunications, and broadcasting. In addition, the government announced its intent to abolish the Foreign Investment Promotion Board to reduce barriers to entry.
“India’s vast domestic market is an added attraction for foreign companies. Investors are looking at India’s phenomenal economic performance as a key selling point.
“It is forecast to be the fastest-growing major economy in the world in the coming years, which should provide a variety of investment opportunities to global firms,” Vikas added. fii-news.com
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