India remains an attractive destination for Foreign Direct Investments (FDI) due to good economic growth prospects and skilled workforce. The results of a Deloitte survey released on Tuesday showed that many international industrialists believe in India’s short- and long-term prospects and are planning to make additional investments and first-time investments in the country.
According to the ‘India’s FDI Opportunity’ survey, 1,200 top executives of multinational companies in the US, UK, Japan and Singapore were questioned in the survey. It found that India remains an attractive destination for investment, scoring high marks for its skilled workforce and good economic growth prospects.
FDI can come in these sectors
It said that India can target to attract more FDI in seven capital-intensive sectors – textiles and apparel, food processing, electronics, pharmaceuticals, vehicles and parts, chemicals and capital products. These sectors contributed $181 billion to the country’s trade exports in 2020-21.
American, British industrialists have more faith in India
According to the survey, these seven sectors have the necessary potential, opportunity and potential to show quick results and set a global precedent. It found that the US has the strongest positive sentiment towards India compared to markets such as China, Brazil, Mexico and Vietnam. Industrialists from America and Britain expressed more confidence in the stability of India.
Doing business in India is challenging compared to these two countries
The survey found that despite recent reforms to improve ease of doing business in India, there remains low awareness among investors about these reforms. The survey found that India was considered to be a more challenging environment to do business than China and Vietnam.
It said that while India is considered to be both politically and economically stable, the country scored low in the category of institutional stability, i.e. regulatory clarity and efficient judicial redress and mechanism. It also said that inadequate infrastructure was another negative factor reported by existing and potential investors.
India moving towards becoming a $5,000 economy
Punit Ranjan, CEO, Deloitte Global, said, “We believe that the outlook can improve only because of the improvement in ease of doing business in India, which includes financial leverage and other improvements. These positive steps further reassure me that India is moving towards its ambition of becoming a $5,000 economy.
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