Rising one spot to rank 8 in this year’s AT Kearney Foreign Direct Investment (FDI) Confidence Index, India remained in the top 10 for the second year in a row. The country’s level of confidence in a market as a future destination for FDI scored 1.68 on a 0 to 3 scale, with 31 per cent of the surveyed respondents being more optimistic on economic outlook over the next three years.
As per the survey, one likely reason for India’s growing FDI attractiveness is its extraordinary economic performance and another reason for investor optimism is the country’s mammoth population which is creating a large potential workforce and consumer base. It further added that among the investors surveyed, over half said a successful GST implementation would cause them to significantly or moderately increase their investment in India.
The survey noted that the government is considering several important policy reforms to further boost FDI inflows and a proposal to loosen FDI regulations on the retail sector for domestically manufactured goods is being evaluated, in part to support the country's 'Make in India' initiative and bolster the manufacturing industry, which has historically lagged services in FDI. Besides, it noted that the government is eliminating the need for FDI approvals in sectors where licenses are also required, such as defence, telecommunications and broadcasting.