With relaxation in FDI (Foreign Direct Investment) norms to develop investor sentiments, India has emerged as the most attractive investment destination exceeding neighboring China and the US, says a report.
The global survey of leading consultancy firm Ernst & Young (EY) has ranked India as the most attractive investment destination followed by Brazil and China at second and third positions, respectively. While Canada is placed at forth position, the US is at fifth position. Other nations in the top ten are South Africa (6), Vietnam (7), Myanmar (8), Mexico (9) and Indonesia (10).
“With sharp currency depreciation and opening up of FDI in various sectors, India has become an attractive investment destination for foreign investors”, EY said.
In August, the government announced relaxation in FDI norms in many sectors, including multi-brand retail and telecom.
According to the global consultancy firm, due to the present macro-economic pressures and heavy debt stack, several Indian companies are looking to part from non-core businesses. This has created a large opportunity for foreign players contesting for a greater role in the Indian market.
The US, France and Japan have emerged as top three investors likely to invest in India.
With respect to India, sectors with the highest level of anticipated business include automotive, technology, life sciences and consumer products. About 38 per cent of the respondents felt that Mergers and acquisitions (M&A) volumes in India are expected to improve over next one year.
“Indian companies also reflect an intensive focus on job creation as well as optimizing operations to deliver cost reduction”, the report said.
Amit Khandelwal, National Leader & Partner (Transaction Advisory Services) at EY, said, “The investor outlook for India remains positive, despite the challenges the country’s economy has faced in the recent past. On the other hand, Indian corporate entities have started looking at developed markets for making acquisitions. After two years, European countries (UK and Germany) have made a comeback on the potential investment destinations list for Indian companies”.
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