globalEDGE Blog: India: Top Global Destination for Foreign Investment

India: Top Global Destination for Foreign Investment

With draws such as competitive labor costs, profitable domestic markets, and a skilled workforce, India is a top candidate for foreign investment. India has very strong management and business education systems, leading to a working class of citizens that foreign companies can accept as the workforce in expanding business. India's infrastructure, consumer products, technology, media, telecommunications, and life-sciences sectors are expected to drive the country's growth over the next few years.

In an attractiveness survey done by Ernst & Young, more than half of the international business leaders surveyed plan to enter or develop existing operations in India over the next year. Respondents with an emerging market approach also said that India accounts for more than 20% of total capital allocated for the developing world. India is also expected to be a chief manufacturing center by 2020.

One key feature of India's attractiveness is the increased interest from the Middle East and Southeast Asia.  Also, the world is starting to recognize the FDI potential that India has. The United States invested the most in India, accounting for 30.2% of foreign investment in India, while seven of the top ten investors were from Western Europe. Another key feature is that there is a rise in infrastructure development and investors are expecting the infrastructure and industrial sectors to become more attractive in the coming years. Lastly, there are six steps needed for India's improvement: enhancing its business environment, developing its infrastructure, advancing production, improving the taxation system, easing FDI, and increasing awareness of emerging cities.

Businesses across the globe are starting to see the opportunities and attractiveness of India.  Check out the globalEDGE Module: Doing Business in India to learn more about the business environment and the current investment climate in India.

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