Pointing to the various reform measures, like introduction of a goods and services tax (GST) and the bankruptcy code, global credit rating agency, Moody's Investors Service in its latest report has said these reforms taken by the government may attract higher levels of foreign direct investment (FDI) in India.
In its report titled ‘Asia's structural reforms could get effectiveness boost from stronger global demand’, the rating agency also praised government’s initiative of raising FDI cap in a number of sectors along with steps taken towards the ease of doing business and noted that FDI has already increased substantially, albeit from a low base.
Along with hopes of rise in India’s FDI, Moody's Investors Service is also expecting increment in Indonesia’s FDI on the back of their government’s reforms over the past few years. The report further added that a robust global environment is likely to amplify the positive impact of the reforms on these two countries’ attractiveness to foreign investors.
Besides, the report found the global demand has been strengthening since the end of last year which has buoyed Asia Pacific’s trade-reliant economies. However, it said that faster export growth has yet to feed into a sustainable acceleration in output growth.