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03-May2018

India slides 3 spots to 11th position in AT Kearney's FDI Confidence Index 2018

Snapping its two-year rising streak in the rankings, India has dropped by three spots to eleventh position in global consultants AT Kearney's Foreign Direct Investment (FDI) Confidence Index 2018. According to the report, India's position was pushed out of the top 10 for the first time since 2015. It indicated that besides India, China (5) and Singapore (12) have ranked lower this year, while Australia has risen to eight and New Zealand jumped to the sixteenth spot in only its second year on the Index. It added that Japan and South Korea hold steady at sixth and eighteenth spot, respectively.

The report further stated that India had secured eighth position in 2017, while it was at ninth rank in the previous year. Further, it said that some policies may have deterred investors, at least in the short term. It pointed out that the nationwide goods and services tax (GST) regime rolled-out on July 1 last year, for example, has faced implementation challenges, and the demonetisation of Rs 500 and Rs 1000 currency notes announced on November 8, 2016 disrupted business activity and weighed on economic growth. About Asia Pacific region, it said that investor preference for the region appears to have declined slightly, with only seven Asian countries appearing on this year's Index.

As per the report, investors based in the Americas and in the industry sector rank India the highest in terms of their intention to invest there. It pointed out that 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. Besides, it said that 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. It added that FDI in India grew by a meager 0.27 percent to $35.94 billion during April-December 2017.


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