Multinational companies optimistic about India’s growth prospects, CII survey sh

Multinational companies operating in India remain optimistic of the country’s growth prospects amid global economic uncertainty, a CII-EY survey said. Foreign direct investments (FDI) in India could touch a combined $475 billion in the next five years, it said.

About 71% of MNCs in India consider the country an important destination for their global expansion, the report said. It pointed out that the time is ripe for India to take the leap to the next level of economic development, including early closure of free trade agreements, continued reforms to enhance ease of doing business, faster implementation of infra projects and goods and services tax reforms.

While 96% of the respondents are optimistic about India’s growth prospects and expect it to perform even better in the short to medium term (3 to 5 years), 43% of the respondents said it would perform significantly better, said the report titled Vision—Developed India: Opportunities and Expectations of MNCs.

The report said India has seen a consistent rise in FDI in the last decade, with FY22 receiving $84.8 billion, despite the impact of the pandemic and geopolitical developments. “Against the backdrop of growth challenges being faced by major economies of the world and new geopolitical issues, it is heartening to note that MNCs consider India an attractive investment destination and are planning expansion. We are confident that the continuing reform momentum by the government will attract increasing volume of investment from MNCs and facilitate their larger integration in domestic supply chain,” said Chandrajit Banerjee, director general, CII. 

The ministry of commerce and industry on Saturday said India is on track to attract $100 billion FDI in the current fiscal on account of economic reforms and ease of doing business. Meanwhile, during the April-June quarter, FDI equity inflows declined 6% to $16.6 billion.

In FY21, infrastructure activities accounted for about 10% share of the total FDI inflows of $81.9 billion. The commitments for investments in the infrastructure sector offers assurance about India’s serious aspirations for providing best-in-class infrastructure and new opportunities for investments. Optimism on India’s growth is led by strong momentum in domestic consumption, a growing services sector, digitalization, and the government’s focus on manufacturing 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 $1 trillion by 2025, it added.