71 percent of MNCs operating in India consider the country an important destination for their global expansion, based on both short-term and long-term prospects.
71 percent of MNCs operating in India consider the country an important destination for their global expansion, based on both short-term and long-term prospects.
Even in investor uncertainty as a result of the pandemic and geopolitical conflict, India has the potential to attract $475 billion foreign direct investment (FDI) over the next five years due to its focus on reforms and economic growth , as per a report of the Confederation. Indian Industry (CII) and EY.
FDI in India has seen steady growth over the last decade, receiving FDI inflows of $84.8 billion in FY 2021-22 despite the impact of the COVID-19 pandemic and geopolitical developments on investment sentiment, the report said. .
“India is seen as an emerging manufacturing hub in global value chains, as a growing consumer market and as a hub of the ongoing digital transformation. Moreover, in the rapidly changing geopolitical environment, India’s large and stable democracy and continuous reform measures are recognized by multinational companies (MNCs),” the report said.
The report titled ‘Vision-Developed India: Opportunities and Expectations of MNCs’ states that 71 per cent of MNCs operating in India consider the country an important destination for their global expansion. Optimism is driven by both short-term and long-term prospects.
“Most of the MNCs feel that the Indian economy will perform significantly better in 3-5 years, as 96% of the respondents are positive about the potential of India as a whole,” the report said.
According to the report, confidence in India’s potential stems from strong consumption trends, digitization and a growing services sector as well as the government’s strong focus on infrastructure and manufacturing. The consistent efforts of the Government of India to reduce regulatory hurdles are also fostering a positive sentiment among MNCs.
More than 60% of MNCs in the report spoke of an improvement in the business environment in the last three years. “As the business environment continues to improve, MNCs seek to increase the effectiveness of the National Single Window for Approval/Clearance; More tax certainty, and stronger contract enforcement mechanisms, among other measures,” it said.