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India out of top 10 countries attracting FDI for the first time since 2002


Updated: July 30, 2015, 10:41 AM IST
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India out of top 10 countries attracting FDI for the first time since 2002

India is out of the top 10 countries attracting Foreign Direct Investment (FDI), according to a survey by leading global management consulting firm AT Kearney. The Foreign Direct Investment Confidence Index 2015 conducted by AT Kearney reveals a not so good news for India in terms of rankings even as FDI in the country registered a 26% increase in 2014 when compared to 2013. India received $35 billion as FDI in 2014.

But despite the increased in FDI flow, other countries have done much better and India has fallen four spots to 11th, losing its top 10 position for the first time since 2002. It was ranked seven in 2013 and it best ranking has been two in 2002 and 2007.

As part of plans to boost economic growth and modernise the bureaucracy, Prime Minister Narenda Modi’s new government launched the “Make in India” initiative in September 2014, aiming to improve the ease of doing business in India, and remove or relax foreign equity caps in several areas.

Revised estimates indicate that India’s GDP grew faster than China’s in 2014-15, and its consumer market remains significant, sparking broad investor interest. In April 2014, UK-based Diageo doubled its stake in United Spirits Ltd, India’s largest spirits company, for $1.9 billion. Vodafone bought full control of its Indian unit for $1.5 billion, the first foreign carrier to gain full ownership since the government removed the 74% cap on outside ownership in the telecom industry.


The United States of America tops the Index for the third straight year. The United States’ lead over second-place China shrank from 2013’s record-setting margin, but it still leads all countries when it comes to investors’ positive macroeconomic outlook. A total of 46% of business executives say they are more optimistic about the US economy’s outlook than they were a year ago, and only 10% say they are more pessimistic.


Asia-headquartered companies are the most optimistic about the US economy, with 44% predicting GDP growth above 3.6% over the next three years. International business executives even say that they are willing to overlook continued political gridlock in Washington, DC.


China is second for the third straight year. Business executives are carefully watching China for economic growth of around 7%, and for signs of a successful transition to a consumption-led economy. If those indicators emerge, most executives say their companies would increase investment activity into China.


Overall, countries in Asia Pacific have a mixed showing in the Index, with Japan rising to 7th (from 19th 2013), and South Korea reentering the Index at 16th after going unranked in 2014. Australia (10th), India (11th), and Singapore (15th) fall in the rankings but maintain top 20 positions.


First Published: July 30, 2015, 10:32 AM IST
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