India is poised to become the world’s fastest growing major economy in 2015, reports our 2015 India Attractiveness survey.
Economic fundamentals stand strong, and global interest is on a steady upswing. The election of a pro-reform Government and its various initiatives – Make in India, Digital India, and 100 Smart Cities – have added to increased optimism.
Key factors driving India’s attractiveness
1) Number one FDI destination:
India has emerged as the number one FDI destination in the world during the first half of 2015. With FDI capital inflows of US$30.8b, India has outpaced all other economies, moving up to the premier position from being in the fifth spot during the corresponding period of the previous year.
2) India at the top – most attractive market:
A leading 32% of the investors ranked India as the most attractive market this year while 60% placed the country among the top three investment destinations.
3) Manufacturing lead investment plans:
Manufacturing has regained its share in FDI capital flows in 2014, amounting to approximately 46%. Investors are most optimistic about the sector, with 62% of those interested in expanding or entering India over the next year, saying that they plan manufacturing activities.
4) Make In India program – positive for manufacturing:
Within six months of its announcement, 55% of our survey’s respondents were aware of the Make in India program and 69% of those who are aware of the initiative are likely to invest in manufacturing in the next five years.
5) Investor highlight improvements – FDI policies, ease of doing business
Business leaders find India’s macroeconomic and political stability, FDI policy and ease of doing business more attractive in 2015, compared with EY’s 2014 India attractiveness survey.
6) India in 2020 – a promising outlook:
Investors see India speeding up the pace toward becoming one of the world’s top destinations for manufacturing, as well as a regional hub for operations.
7) Reforms expected to drive growth:
A number of recent government reforms are being well received by investors, who expect them to increase India’s FDI attractiveness significantly.
Action points for the Government to improve India’s investment climate
- Develop infrastructure
- Increase regulatory ease and transparency
- Streamline taxation
- Implement economic reforms
- Simplify labor laws
Action points for businesses to leverage their presence in
- Understand India’s unique investment climate and market dynamics
- Assess sector options
- Evaluate strategic options
- Prepare for tax changes