Most companies plan to expand factories in India
Over 30 per cent of the business leaders from MNCs who were surveyed said that India is the most attractive investment destination in the world, followed by China, Southeast Asia and Brazil.
Mumbai: The government’s effort to attract foreign investment through pro-business economic reforms and cutting red tape have finally started bearing fruits. A latest survey by global audit firm Ernst & Young (EY) ranks India as the most attractive investment destination in the world for the next three years.
According to EY’s 2015 India attractiveness survey published on Wednesday, 32 per cent of the business leaders from MNCs who were surveyed said that India is the most attractive investment destination in the world, followed by China, Southeast Asia and Brazil.
A majority of the business leaders were upbeat on the Indian manufacturing sector as more than three out of five respondents said that they have plans to invest in India over the next year and 62 per cent are looking at manufacturing, both to serve the Indian and global markets from India.
Most of these respondents prefer to expand existing operations, followed by expansion through acquisitions. Compared to the 2014 survey, the number of respondents who believe that India will be among the world’s leading top three destinations for manufacturing by 2020 has increased from 24 per cent to 35 per cent, while those who believe India will evolve as a regional and global hub for operations is up from nine per cent to 21 per cent.
The increased interest in investing in manufacturing is also reflected in FDI inflows, which showed a 62 per cent increase in 2014 compared to the previous year, ahead of the 31 per cent growth in the services sector FDI.
In the same period, the share of manufacturing in total FDI increased from 37 per cent to 45 per cent. The trend continues in the first half of 2015 with manufacturing posting a 221 per cent rise in FDI inflows.
The survey also highlighted that the ‘Make in India’ programme has resonated well with global investors with 55 per cent of the respondents saying that they are aware of its initiative within six months of its launch in September 2014. 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 factories to India in the next five years.
( Source : deccan chronicle )
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