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India jumps to 8th place on Global FDI Confidence Index

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India has jumped one spot to rank 8th in the 2017 AT Kearney Foreign Direct Investment (FDI) Confidence Index with 31 percent of the surveyed respondents being more optimistic on economic outlook over the next three years.

“Investors see India as a vast and diverse up-and-coming market with plans to increase investments there over the near to medium term,” said Vikas Kaushal, Partner and Head of India at AT Kearney.

Investor confidence in India has been growing steadily over the last two years, making it one of the top two emerging market performers on the FDI Index, said the UK-based AT Kearney in the index.

“Reform efforts by the current government have improved the country’s investment environment. This includes the national goods and service tax (GST) reform, the largest non- direct tax reform in India in recent years,” Vikas said.

“India’s vast domestic market is an added attraction for foreign companies. Investors are looking at India’s phenomenal economic performance as a key selling point.

“It is forecast to be the fastest-growing major economy in the world in the coming years, which should provide a variety of investment opportunities to global firms,” he said.

Among the investors surveyed, over half said a successful GST implementation would cause them to significantly or moderately increase their investment in India.

More broadly, 70 percent of the respondents plan to maintain or increase their FDI in India in the coming years, according to Kearney.

India’s government is considering further policy reforms to further boost FDI inflows. A proposal to loosen FDI regulations on the retail sector is being evaluated, in part to support the country’s ‘Make in India’ initiative and bolster the manufacturing industry, said the consultancy.

The government is eliminating the need for FDI approvals in sectors where licenses are also required, such as defence, telecommunications and broadcasting.

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