India Slips 3 Spots in AT Kearney’s FDI Confidence Index

India has slipped three spots to rank 11th in AT Kearney’s 2018 Foreign Direct Investment Confidence Index but it remains the second most attractive emerging market. China has dropped two positions from a year ago to rank fifth in the index.

The Chicago-headquartered management consulting firm said that India’s sheer market size and rapid economic growth makes it attractive to investors. “Investors based in the Americas and in the industry sector rank India the highest in terms of their intention to invest there. This confidence may be a result of the government’s ‘Make in India’ initiative,” AT Kearney said in a statement.“Most investors are increasingly localising their global operations as a result of regulatory and market forces, requiring greater levels of FDI,” it said.

Reforms that have enhanced India’s attractiveness include the elimination of the Foreign Investment Promotion Board and the liberalisation of foreign investment thresholds for retail, aviation and biomedical industries, AT Kearney said.

The company has pegged India’s inward foreign direct investment at a record $45 billion in 2017.

AT Kearney has estimated that 79% foreign investors plan to step up their investment in India in the next three years. “This is a four percentage point increase on last year’s results, highlighting the continued bullishness of investors amidst geopolitical turmoil and economic expansion,” it said in the statement.

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