“NEW DELHI: A survey by the Confederation of India Industry (CII) and EY of around a hundred companies has revealed that India has emerged as one of the top three choices for overseas investments in the next 2-3 years and about 30% of the firms are planning to invest more than $500 million.
As per the survey, for more than two-thirds of the multi-national corporations (MNC) respondents and 25% of the non-India headquartered MNCs, India as the first choice for investments.
Aimed to gauge the market sentiment among the Indian as well as non-Indian MNCs, the survey noted that about half the respondents see India among the top three economies or leading manufacturing destinations of the world by 2025. It assesses India’s competitiveness in terms of key parameters and analyses whether India is likely to be the “+1” jurisdiction for those seeking to relocate investments or making fresh investments.
The survey themed around ‘How can India step up its game?’ shows that more than 80% of all the respondents and 71% of the non-Indian headquartered respondents plan to make investments globally in the next 2-3 years.
“The CII-EY survey results strongly indicate that India will be the next global investment hotspot with a high proportion of MNCs placing it at the top of their investment agenda,” said Chandrajit Banerjee, director general, CII.
Market potential, skilled workforce, and political stability are the top three reasons that make India a favoured foreign direct investment (FDI) destination besides cheap labor availability, policy reforms and raw material availability.
Banerjee attributed the global investor interest to the recent major structural reforms, proactive government processes and the quick pickup in economic activity following Unlock measures.
The report comes in the wake of FDI into India in the first quarter of FY21 plunging 60% from a year-ago to $6.5 billion amid the Covid-19 pandemic.
“For 40% of the non-Indian HQ companies, effective implementation of labour laws and FDI reforms are very significant, while 52% of the Indian HQ companies believe corporate tax rate reduction would be the prime mover of future investments,” CII and EY said.
However, firms highlighted infrastructure development, faster clearances, and implementation of the improved labour laws and labour availability as the top three issues followed by R&D, and tax reforms besides faster turnaround time for exports- imports, improved cargo handling, and trade facilitation measures.
·India is top choice for future investments for 2/3rd of MNCs
·50 % of cos see India among top 3 economies, manufacturing destinations by 2025
·Capacity expansion, digital transformation, R&D to drive new FDI
·Market potential, skilled workforce, political stability make India attractive
·Cos want govt to focus on infra development, faster clearances
·MNCs seek labour law implementation, trade policy reform”