INDIA CAPTIVATES
Outpacing the competition
A leading 32 % of international investors ranked India as the most attractive market, while 60 % placed the country among the top three investment destinations. Respondents believe that ongoing economic reforms are increasing opportunities for them to develop their companies profitably in India. Enthusiasm is strongest among companies with annual revenue exceeding US $ 2b. Overall, 71 % of respondents from big companies think India will be more attractive than other regions. Respondents who already have business activities in India are more confident about the country’ s attractiveness, perhaps an indication of its real potential and equally of its relatively low awareness among those not invested in the country. Among those who are not established in India, 35 % rank India their most attractive option, though they place it second only to China( which 47 % see as their preferred investment destination). Although China’ s economic growth is slowing, it has a huge internal market, a broad manufacturing base and a 30-year record of strong growth. International investors, however, are increasingly looking at India as an investment destination— to manufacture for the domestic and global market, as a center for shared services, and as a regional and a global hub for operations.
Low labor costs
India’ s most attractive feature for foreign investors is abundant labor. According to the UN Conference on Trade and Development, India’ s workforce will reach 557 million by 2020, even as the global labor market tightens. To reinforce this labor cost advantage, the Indian Government is aiming to improve labor skills. Its National Skill Development Policy 2015 aims to ensure one Indian in four has skills appropriate to the labor market by 2020, and there are plans to open 1,500 more industrial training institutes and 5,000 skill development centers across the country.
A huge and increasingly prosperous market
With 1.26 billion people and growing, India will surpass China and become the world’ s most populous nation by 2022. Last year, household incomes increased on average by 10 %. By 2020, India’ s per capita income( by purchasing power parity) is expected to rise 59 %, outpacing spending-power growth in the US( 23 %), the UK( 22 %), Brazil( 12 %) and Russia( 12 %). And even as China’ s population starts to shrink, India’ s looks set to go on growing: the country has 356 million young population aged 10 to 24, a number that exceeds the entire population of the US( 319 million).
Greater political and macroeconomic stability
The election of a pro-reform Government with a clear majority has encouraged investors. As compared with 59 % in the previous year, 74 % of them rated India’ s political stability as attractive. Investors are also much more confident now about India’ s economic stability. The Government’ s ongoing
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