Global companies confident to invest in India: survey

NEW DELHI: About 44% of the 1,200 business leaders surveyed in the US, Japan and Singapore are planning additional or first-time investment in India and nearly two-thirds of the first investments will be made in the next two years, according to a survey conducted by consulting firm Deloitte.
The survey, conducted at the height of the second wave of the Covid-19 pandemic in India this year, found that a large portion of international business leaders remain confident in the short- and long-term prospects of the ‘India and are preparing plans to make initial investments in the country.
Analysis by Deloitte has shown that India will need $ 8 trillion in gross capital formation (entirely new new assets) to grow into a $ 5,000 billion economy by FY 2027. Based on past trends, India will need at least $ 400 billion, cumulatively, over six years, in FDI.
When asked to identify the sectors most likely to see new investment, utilities (energy infrastructure) led the way (57%), mirroring India’s plans to dramatically increase its energy capacity. renewable, while financial services (49%) and healthcare (48%) also ranked first. .
India has the strongest positive perception of the United States compared to markets such as China, Brazil, Mexico, and Vietnam. Given the historic strong US and UK ties to India, US and UK business leaders have expressed greater confidence in India’s stability. However, respondents from Japan and Singapore currently rate Vietnam as their preferred investment destination, according to the survey.
“After the challenges of the past 18 months, the survey is a positive validation of the underlying strengths of the Indian economy, particularly its appeal to foreign investors. We believe the outlook can only improve due to the improved ease of doing business in India which includes tax breaks and other reforms. These positive steps further convince me as India is moving towards its ambition of a $ 5,000 billion economy, ”Punit Renjen, CEO of Deloitte Global, said in a statement from the consulting firm.
Although there is an important crossover, more and more business leaders, especially in Japan, are investing in India to access the domestic market rather than using India as a springboard for exports, according to the investigation.
He said that despite recent reforms aimed at improving the ease of doing business in India, investor awareness remains low. Business leaders in Japan (16%) and Singapore (9%) were least aware of initiatives such as the digitization of customs clearance and production-related incentives for manufacturers. As a result, India was seen as a more difficult environment for doing business compared to China and Vietnam. About 75% of the activity
leaders said they were more willing to invest in India after being made aware of existing government programs, incentives and reforms, survey found
India may aim to attract more FDI in seven capital-intensive sectors (textiles and clothing, agribusiness, electronics, pharmaceuticals, vehicles and parts, chemicals and APIs, and capital goods) that have contributed $ 181 billion in merchandise exports in fiscal year 2020-21. He said the investments would help six-fold export growth in these sectors to $ 1,075 billion by fiscal year 2026-2027.

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