Foreign firms bullish on India, says Ficci

The improved performance of their Indian subsidiaries has led foreign companies make a more bullish assessment of India.

In a survey of 140 foreign companies by the Federation of Indian Chambers of Commerce and Industry (Ficci), 73 per cent said they were making a 'positive' assessment of India as an investment destination.

More than 77 per cent of the respondents have said their Indian operations are more profitable and nearly three-fourths are able to meet or surpass their profitability targets.

The survey titled 'The experience of foreign direct investors in India' indicated that the growth in the last few quarters benefited all segments of the manufacturing and services sectors, which has enabled these firms to scale up their capacity utilisation.

Also, nearly a fifth of the respondents have reported a near complete or full capacity utilisation and another 42 per cent of the companies surveyed are utilising between 70-80 per cent of their installed capacity.

About 86 per cent of the respondents are planning to expand their operations in India. This is higher than the 78 per cent recorded in the FDI survey 2003.

The respondents to this survey were from companies involved in chemicals, infotech-related services, rubber and plastic goods, electrical machinery, consumer goods, machine tools, motor vehicles and other transport equipment.

On operational parameters, the overall policy framework in India has been rated as being 'average to good' by 88 per cent of the respondents as compared to 82 per cent last year. Also, 86 per cent have rated the approvals and applications at the Centre as 'average to good' against just 69 per cent last year.

Also, 94 per cent have rated ease in bringing funds to India as 'medium to high', while 74 per cent have rated the legal framework and regulatory mechanism as 'average to good'.

Again, 79 per cent of the respondents have said the of skilled manpower is 'good' in India.

In the survey, 49 per cent of the respondents were of the opinion that the growth rate of the Indian market was 'high' and another 40 per cent said it was 'moderate'.

Survey results

• A fifth of the respondents have reported a near complete or full capacity utilisation
• About 86 per cent of the respondents are planning to expand operations in India
• The overall policy framework in India has been rated as being 'average to good' by 88 per cent of the respondents
• The FDI Attractiveness Index registered a value of 3.9, which is a gain of almost 8 per cent from the previous two years