International investors remain confident in India’s short- and long-term growth prospects and prepare to make additional and new investments in the country, according to a survey of 1,200 business leaders released by Deloitte.
India has attracted foreign direct investment at record levels even during the COVID-19 pandemic, with total FDI inflows amounting to $ 81.72 billion in 2020/21, 10% more than the previous exercise.
The survey conducted at the height of the second wave of the pandemic showed that 44% of those polled in the United States, United Kingdom, Japan and Singapore said they were planning additional or initial investments in India. .
Among new investors, nearly two-thirds plan to invest in India over the next two years, he showed.
Utilities, especially energy infrastructure, got 57% of the vote in terms of sectors that will see new investment, while financial services at 49% and healthcare at 48% were other highly ranked sectors. .
Deloitte said FDI is widely seen as a foundation for accelerating a country’s economic growth.
“Although foreign investment inflows into India have grown steadily over the past five years, they have not contributed proportionately to the country’s capital formation and GDP,” the report says.
Indian Prime Minister Narendra Modi said in 2019 that his country is targeting a $ 5,000 billion economy by 2024. India’s GDP is currently less than $ 3 trillion.
Several economists have said the pandemic is jeopardizing the country’s economic goal of $ 5,000 billion by 2024 and that it will take at least two more years to reach that goal.
Deloitte, in an analysis accompanying the report, said India would need $ 8 trillion in gross capital formation or entirely new new assets to grow into a $ 5,000 billion economy by 2026/27 .
“Based on past trends, India will need at least $ 400 billion, cumulatively, over six years, in FDI,” he added.
While India is viewed as politically and economically stable, it scored lower in terms of institutional stability, i.e. regulatory clarity and effective legal remedies and mechanisms, according to the survey.
Poor infrastructure was another negative factor cited by existing and potential investors.
“After the challenges of the past 18 months, Deloitte’s survey is a positive validation of the underlying strengths of the Indian economy, particularly its appeal to foreign investors,” said Punit Renjen, CEO of Deloitte Global.
(Reporting by Swati Bhat; Editing by Jacqueline Wong)
Photo: General view of the Mumbai skyline. Photographer: Punit Paranjpe / UKTN / Getty Images
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