September 25, 2021

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The World Live Breaking News Coverage & Updates IN ENGLISH

Global businesses confident about investing in India: Survey

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Global businesses confident about investing in India: Survey
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Global businesses confident about investing in India: Survey
Global businesses confident about investing in India: Survey

NEW DELHI: About 44% of the 1,200 business leaders surveyed across US, Japan and Singapore are planning additional or first time investments in India and nearly two-thirds of first-time investments will be made within the next two years, according to a survey undertaken by consulting firm Deloitte.
The survey, conducted during the peak of the second wave of the Covid-19 pandemic in India this year, found that a large proportion of international business leaders remain confident in India’s short- and long-term prospects and are readying plans to make additional and first- time investments in the country.
An analysis by Deloitte showed that India will need $8 trillion of gross capital formation (new greenfield assets) to become a $5 trillion economy by FY2027. Based on past trends, India will need at least $400 billion, cumulatively, over six years, in FDI.
When asked to identify sectors most likely to see new investments utilities (energy infrastructure) led the way (57%), reflecting India’s plans to significantly grow its renewables capacity, while financial services (49%) and healthcare (48% ) also ranked highly.
India has the strongest positive perception in the US when compared to markets such as China, Brazil, Mexico, and Vietnam. Given US and UK’s strong historic ties with India, US and UK business leaders expressed greater confidence in India’s stability. However, respondents from Japan and Singapore currently view Vietnam as their preferred investment destination, the survey showed.
“After the challenges of the past 18 months, the survey is a positive validation of the underlying strengths of the Indian economy, in particular its appeal for foreign investors. We believe the outlook can only get better because of India’s improving ease of business, which includes fiscal benefits and other reforms. These positive steps further convince me that India is moving towards its ambition of a US$ 5 trillion economy,” Punit Renjen, Deloitte Global CEO was quoted as saying by a statement from the consulting firm.
Although there is significant crossover, more business leaders, especially in Japan, are making investments in India for access to the domestic market rather than using India as a springboard for exports, the survey showed.
It said that despite recent reforms to improve ease of doing business in India, awareness among investors remains low. Business leaders in Japan (16%) and Singapore (9%) were least aware of initiatives such as the digitisation of customs clearance and production linked incentives for manufacturers. Accordingly, India was perceived as a more challenging environment to do business compared to China and Vietnam. Roughly 75% of business
leaders said they were more willing to invest in India after being made aware of existing government programmes, incentives and reforms, according to the survey
India can target attracting greater FDI into seven capital-intensive sectors—textile & apparels, food processing industry, electronic goods, pharmaceuticals, vehicles & parts, chemicals & API, and capital goods—that have contributed $181 billion of merchandise exports in fiscal year 2020-21. It said such investments will help improve the export growth of these sectors by six times to US$1,075 billion by FY2026-27.

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