India remains an attractive destination for investments: Deloitte survey

According to a Deloitte survey, India remains an attractive destination for foreign direct investments (FDI) due to its robust economic development prospects and trained workforce.

According to the report, a substantial number of international business executives remain optimistic about India's short- and long-term prospects and are preparing to make extra and first-time investments in the country.

“The survey, which polled 1,200 executives from multinational corporations in the United States, the United Kingdom, Japan, and Singapore, found that India remains an attractive investment destination, scoring highly for its skilled workforce and economic growth prospects,” the survey - India's FDI Opportunity - stated.

Textile and apparel, food processing, electronics, pharmaceuticals, vehicles and parts, chemicals, and capital goods are seven capital-intensive sectors that generated US$ 181 billion in merchandise exports in 2020-21, according to the report.

According to the research, these seven industries have the essential potential, opportunity, and capacity to produce rapid results and create a worldwide precedent.

It further stated that, rather than utilising India as a springboard for exports, more business executives, particularly in Japan, are investing in India to get access to the local market.

“When compared to markets like China, Brazil, Mexico, and Vietnam, India has the strongest favourable perception in the United States. The US and UK business executives showed more trust in India's stability,” it added.

According to the research, respondents from Japan and Singapore consider Vietnam to be their favourite investment location.

Despite recent changes aimed at making it easier to do business in India, the survey revealed that investor awareness is still low.

According to the report, business executives in Japan (16%) and Singapore (9%) were the least aware of efforts such as digitalisation of customs clearance and production-linked incentives for manufacturers.

“As a result, India was perceived as a more difficult environment to do business in than China and Vietnam,” the report said, adding that while India is seen as politically and economically stable, it scored lower on institutional stability, which includes regulatory clarity and efficient judicial redress and mechanisms.

Inadequate infrastructure was also highlighted as a negative issue by existing and potential investors, according to the report.

“We believe the prognosis can only grow better because of India's improved ease of doing business, which includes fiscal advantages and other changes. These encouraging signs persuade me that India is on its way to achieving its goal of a US$ 5 trillion GDP.” said Deloitte Global CEO Mr. Punit Renjen.

According to Mr. N Venkatram, CEO of Deloitte India, focusing FDI into capital-intensive sectors is critical to the country's gross capital formation and strengthening its position as a global trading partner.

“As global companies seek alternative manufacturing destinations, India is well-positioned to take a disproportionate share of the shift,” he added. “The country must continue to execute reforms and measures that promote progress, increasing trust in and competitiveness of India's economy.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.