 "India most attractive investment destination globally, says EY report")
India is considered the most attractive market by international investors, according to a report released by tax consultancy giant EY on Wednesday.
The report ranks India as the premier choice for investors worldwide, with 32 per cent of respondents ranking it the most attractive market. While it shows India’s approval ratings as an investment destination to be more than double that of China and six times that of Brazil, it also points out 60 per cent of respondents placed it among their top three choices for investing.
The second edition of the annual survey by EY explores the investment plans of around 500 global investors, half of whom already had business in the country. A third each were from North America and West Europe, respectively.
India’s outlook among investors has risen, with 37 per cent convinced it would be among the top three economies by 2020, against 29 per cent last year. Existing investor experience has helped, with 70 per cent of businesses, which already operate in India supporting that idea.
Among investment parameters, 80 per cent of respondents cited low labour costs and the burgeoning domestic market as an attractive incentive. The overall stability of the economy and availability of skilled labour also got a thumbs up with 74 per cent of respondents approving them.
Efforts by the Narendra Modi government towards making the country more investment friendly also seems to have been acknowledged, with two-thirds of all respondents citing the foreign direct investment (FDI) policy and the ease of doing business as attractive pull–in factors.
Flagship government programmes such as Make in India and Digital India have also influenced investor choices, although awareness about them remain low. Around 70 per cent of businesses already operating in India and 10 per cent of international ones were aware of Make in India. Amitabh Kant, secretary at the Department of Industrial Policy and Promotion (DIPP), the agency overseeing the programme said the figures were high enough, refusing the argument it needed more active visibility.
Among informed investors, while 69 per cent said they would invest under Make In India, 83 per cent said Digital India would positively impact investment outlook.
The report mentions India as the country receiving the most FDI during January-June 2015, pegging it at $30 billion, data supporting which has been sourced from the market analytics arm of Financial Times.
The Business Standard had earlier reported the figure to be $19.4 billion compared to $14.94 billion in the year-ago period, according to DIPP. Asked about the wide gap in figures, Kant said, “We took into account investments already on the ground, but its also important to note investment commitments made by all countries, (which the other figure did).”
Among the recent administrative reforms which investors believe to positively influence India’s attractiveness as an investment destination, the smart cities project and growing expenditure on infrastructure scored the highest, with 89 per cent of those surveyed approving the same.
Financial inclusion schemes and Digital India came next with 83 per cent approval. India would also benefit from a definitive conclusion to legislation on land acquisition as 75 per cent of investors believe it will attract investments.
In the tax reforms space, the government’s decision to reduce corporate tax rate from the current 30 per cent to 25 per cent in the next four years was hailed by 83 per cent of respondents. The promise of the goods and services tax being implemented by 2016 elicited the approval of 81 per cent of investors.
Among the issues that investors felt should be addressed on a priority basis, infrastructure scored the highest with support from 66 per cent of respondents. Enhancing ease and transparency in business, streamlining taxation and the urgent need to simplify labour laws were cited as other priority areas, which the government needs to look into.
Manufacturing has regained its place as the most favoured sector with 62 per cent of those looking to start or expand their business in the country, looking at the sector. Also, 35 per cent of the respondents were of the opinion that India would be among the top three manufacturers in the world by 2020. The services sector follows next with 42 per cent of investors planning their activities based on it.
Investors are also increasingly looking at India’s second-tier cities, the report says. Leading in this category is Ahmedabad, which was viewed by 26 per cent of respondents as emerging, followed by Jaipur (13 per cent), and Vadodara (12 per cent). Sound infrastructure, widening industrial base and investor friendliness were cited as the reasons.
Other cities such as Vishakhapatnam, Coimbatore and Aurangabad also got mention in the report, owing to industrial diversification, rapid growth and increasing presence of sectoral clusters.
The report ranks India as the premier choice for investors worldwide, with 32 per cent of respondents ranking it the most attractive market. While it shows India’s approval ratings as an investment destination to be more than double that of China and six times that of Brazil, it also points out 60 per cent of respondents placed it among their top three choices for investing.
The second edition of the annual survey by EY explores the investment plans of around 500 global investors, half of whom already had business in the country. A third each were from North America and West Europe, respectively.
India’s outlook among investors has risen, with 37 per cent convinced it would be among the top three economies by 2020, against 29 per cent last year. Existing investor experience has helped, with 70 per cent of businesses, which already operate in India supporting that idea.
Among investment parameters, 80 per cent of respondents cited low labour costs and the burgeoning domestic market as an attractive incentive. The overall stability of the economy and availability of skilled labour also got a thumbs up with 74 per cent of respondents approving them.
Efforts by the Narendra Modi government towards making the country more investment friendly also seems to have been acknowledged, with two-thirds of all respondents citing the foreign direct investment (FDI) policy and the ease of doing business as attractive pull–in factors.
Flagship government programmes such as Make in India and Digital India have also influenced investor choices, although awareness about them remain low. Around 70 per cent of businesses already operating in India and 10 per cent of international ones were aware of Make in India. Amitabh Kant, secretary at the Department of Industrial Policy and Promotion (DIPP), the agency overseeing the programme said the figures were high enough, refusing the argument it needed more active visibility.
Among informed investors, while 69 per cent said they would invest under Make In India, 83 per cent said Digital India would positively impact investment outlook.
The report mentions India as the country receiving the most FDI during January-June 2015, pegging it at $30 billion, data supporting which has been sourced from the market analytics arm of Financial Times.
The Business Standard had earlier reported the figure to be $19.4 billion compared to $14.94 billion in the year-ago period, according to DIPP. Asked about the wide gap in figures, Kant said, “We took into account investments already on the ground, but its also important to note investment commitments made by all countries, (which the other figure did).”
Among the recent administrative reforms which investors believe to positively influence India’s attractiveness as an investment destination, the smart cities project and growing expenditure on infrastructure scored the highest, with 89 per cent of those surveyed approving the same.
Financial inclusion schemes and Digital India came next with 83 per cent approval. India would also benefit from a definitive conclusion to legislation on land acquisition as 75 per cent of investors believe it will attract investments.
In the tax reforms space, the government’s decision to reduce corporate tax rate from the current 30 per cent to 25 per cent in the next four years was hailed by 83 per cent of respondents. The promise of the goods and services tax being implemented by 2016 elicited the approval of 81 per cent of investors.
Among the issues that investors felt should be addressed on a priority basis, infrastructure scored the highest with support from 66 per cent of respondents. Enhancing ease and transparency in business, streamlining taxation and the urgent need to simplify labour laws were cited as other priority areas, which the government needs to look into.
Manufacturing has regained its place as the most favoured sector with 62 per cent of those looking to start or expand their business in the country, looking at the sector. Also, 35 per cent of the respondents were of the opinion that India would be among the top three manufacturers in the world by 2020. The services sector follows next with 42 per cent of investors planning their activities based on it.
Investors are also increasingly looking at India’s second-tier cities, the report says. Leading in this category is Ahmedabad, which was viewed by 26 per cent of respondents as emerging, followed by Jaipur (13 per cent), and Vadodara (12 per cent). Sound infrastructure, widening industrial base and investor friendliness were cited as the reasons.
Other cities such as Vishakhapatnam, Coimbatore and Aurangabad also got mention in the report, owing to industrial diversification, rapid growth and increasing presence of sectoral clusters.