Despite the impact of geopolitical issues and the pandemic, India has seen a consistent rise in foreign direct investment (FDI) in the last decade, with FY2021-22 receiving FDI inflows of USD 84.8 billion, PTI reported, quoting the CII-EY report.
India has optimistic growth prospects for foreign investments, with the potential to attract USD 475 billion in FDI flows over the next five years, according to a CII-EY report.
Nearly 71 per cent of multinational companies (MNCs) working in India consider the country as an important destination for their global expansion.
A majority of MNCs feel that the Indian economy will perform significantly better in 3-5 years, with 96 per cent of respondents being positive about the country's overall potential, according to the report titled "Vision-Developed India: Opportunities and Expectations of MNCs'.
As for continuous improvement in the business environment, MNCs would like to see enhanced effectiveness of the national single window for approvals and clearances; greater tax certainty, and a stronger contract enforcement mechanism, among other measures, said the report.
Over 60% of MNCs reported an improvement in the business environment over the last three years. MNCs appreciate the impact of GST, the government's digital push in various spheres, and transparency in taxation, amongst other reforms, it added.
According to the report, the direction of India's growth is determined by the strong momentum in domestic consumption, services, the digital economy, and infrastructure.
The estimated real growth in consumption is the third highest, behind only the US and China, while the fast-expanding digital economy is expected to reach USD 1 trillion by 2025.
The report said that India is among the fastest-growing large economies in the world. The confidence in its potential stems from strong consumption trends, digitisation, and a growing services sector, along with the government's strong focus on infrastructure and manufacturing, the report said.
India is an attractive investment destination for MNCs, besides the consistent reform measures, is it being a large and stable democracy. The majority of the respondents also see India as an alternative to their China 1 strategy, the report highlighted.
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