As per the global consulting firm Ernst & Young (EY) survey, India has emerged as the most attractive investment destination for overseas investors surpassing neighbouring countries such as China and the US mainly on the back of relaxation in Foreign Direct Investment (FDI) norms.
The survey, based on the assessment of about 1,600 senior executives from large companies across 70 countries, highlighted that sharp currency depreciation and opening up of FDI in various sectors have made the country a favorable investment destination. Further, owing to the prevailing macro-economic pressure and heavy debt burden, several Indian companies are looking to divest non-core businesses, which have created a large opportunity for foreign players vying for a greater role in Indian market. On country wise, the US, France and Japan have emerged as top three investors likely to invest in India particularly in sectors like automotive, technology, life sciences and consumer products.
Furthermore, the survey highlighted that despite the challenges the country's economy has faced in the recent past, global investors’ outlook for India remains positive. Indian companies reflect optimising operations to deliver cost reduction and a concerned focus on job creation. Around 38 percent of the respondents felt that M&A volumes in India are expected to improve over the next 12 months. Conversely, Indian corporate entities have also started looking at developed markets for making acquisitions. EY survey has ranked Brazil and China at second and third positions in most attractive investment destinations followed by Canada and the US at fourth and fifth positions.