India emerged the most attractive investment destination in the world for the next three years in a global survey of top decision-makers in multinational corporations. The second most favoured investment destination is China, followed by Southeast Asia and Brazil. Of the polled business leaders from global corporations, 32 per cent said India was the most attractive investment destination in the world.
Perception about India’s macroeconomic stability is up to 76 per cent in 2015 in comparison to 70 per cent in the 2014 survey, said global consultancy firm EY that published the survey on Wednesday. Similarly the perception about political and social stability is up from 59 per cent in 2014 to 74 per cent in 2015.
The same is also true for relaxation in FDI policy (the score improved from 60 per cent in 2014 to 68 per cent in 2015) and the government’s efforts to ease doing business (up from 57 per cent in 2014 to 67 per cent in 2015).
About 62 per cent said they were looking at manufacturing, both to serve the Indian and global markets from India.
The survey, ‘Ready, set, grow: EY’s 2015 India attractiveness survey’, conducted during March and April 2015, includes the views of more than 500 decision-makers from multinational organisations across sectors.
Compared to the 2014 survey, the number of respondents, who believe that India would be among the world’s leading top three destinations for manufacturing by 2020, had increased from 24 per cent to 35 per cent, while those who believed India would evolve as a regional and global hub for operations was up from 9 per cent to 21 per cent.
Among specific reforms expected to drive growth, 89 per cent of the investors polled said that investment in infrastructure projects and the 100 Smart Cities project would be significant. Financial inclusion, including Digital India and the Government’s proposal to reduce the rate of corporate tax from 30 per cent to 25 per cent, were considered significant by 83 per cent of the respondents.
Implementation of Goods and Services Tax (GST) and legislation on land acquisition were also mentioned by investors as important for attracting FDI.
Speaking at the launch of the report, Industrial Policy and Promotion Secretary Amitabh Kant said: “We are determined to make India an extremely easy and simple place to do business…Our first priority is to do away with the many procedures and rules, followed by bringing in consistency and clarity in all our policies and tax regime and developing a world-class infrastructure.”
Within six months of its launch in September 2014, the Modi Government’s ‘Make in India’ program resonated with investors, with 55 per cent of respondents saying that they are aware of the initiative. Those aware of Make in India are more upbeat about expansion plans, with 70 per cent stating that they are likely to expand or relocate their manufacturing facilities to India in the next five years.
While Bengaluru, Mumbai, Delhi-NCR, Chennai and Pune continue to be the top destinations for overall FDI, the top five emerging cities for FDI ranked by the respondents are: Ahmedabad, Jaipur, Vadodara, Coimbatore and Visakhapatnam.
EY Chairman of the Global Emerging Markets Committee and India Regional Managing Partner Rajiv Memani said: “Over the last year, the improvements in India’s macroeconomic indicators, accompanied with the ongoing efforts to revitalize growth have offered new hope to investors.”
Investors rated India’s domestic market and availability of labour among the most attractive features for doing business.
“We are determined to make India an extremely easy and simple place to do business.”
Amitabh Kant,Industrial Policy and Promotion Secretary
Implementation of GST and legislation on land acquisition are also mentioned by investors as important for attracting FDI
