India slips 3 spots to 11th spot in AT Kearney FDI confidence index

  • India has slipped by three notches to 11th position in the FDI Confidence Index 2018 of global consultancy firm A T Kearney.
  • It said that India fell out of the top 10 for the first time since 2015. China (5), India (11), and Singapore (12) all rank lower in the 2018 edition of the index, while Australia rises to 8th and New Zealand jumps to the 16th spot in only its second year on the Index.
  • India was ranked 8th in 2017, while it was at 9th rank in 2016. The report said that some policies may have deterred investors, at least in the short term.
  • “The 2017 nationwide goods and services tax (GST), for example, has faced implementation challenges, and the 2016 demonetisation initiative disrupted business activity and weighed on economic growth,” it added.
  • However, it added that strong economic performance and the sheer size of the Indian market are also likely to attract investors.
  • Investors based in the Americas and in the industry sector rank India the highest in terms of their intention to invest there, it said.
  • “This confidence may be a result of the governments Make in India initiative, which aims to boost investment in India’s manufacturing sector as well as its pursuit of closer ties with the US,” it said.
  • Reforms that have had a positive impact on India’s attractiveness include the elimination of the Foreign Investment Promotion Board, a government agency responsible for reviewing all potential foreign investment, and the liberalisation of overseas investment thresholds for the retail, aviation, and biomedical industries, the report said.

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