According to a new report, the majority of multinational corporations (MNCs) view India as an alluring investment destination for their global expansion, which will lead to foreign direct investment (FDI) of $475 billion in the next five years as a result of India’s focus on reforms and economic growth. The optimism is driven by both short-term prospects — a majority of MNCs feel that the Indian economy will perform significantly better in three to five years — and in the long term, with 96% of respondents being positive overall about India’s potential, according to a report released by EY-CII, titled ‘Vision – Developed India: Opportunities and Expectations of MNCs’.
The amount of FDI entering India has increased steadily over the past 10 years; in FY22, FDI totaled $84.8 billion, despite the pandemic’s effects and recent geopolitical occurrences’ negative effects on investor mood. India is regarded as a rising manufacturing hub in international value chains, a developing consumer market, and a global pioneer in the digital transformation of both the public and commercial sectors.
The MNCs’ viewpoint on the actions that the government must take and the policy decisions that will fuel the next economic development leap is captured in our report. In order to further support India’s sustainability efforts, it also gives industry perspectives on initiatives that would decarbonize the country’s economy, according to Sudhir Kapadia, partner, tax & regulatory services, EY India.
The survey also suggests that MNCs anticipate progress in the areas of easier business operations, faster completion of infrastructure projects, tax reforms, and the implementation of trade agreements. Additionally, MNC investors in industries including plastics, chemicals, IT/ITeS, and automotive have expressed appreciation for the government’s PLI program, which aims to promote domestic manufacturing. The survey found that the top expectations for the government were continued reforms to improve business-friendliness, quicker implementation of infrastructure projects, early termination of free trade agreements, and GST revisions.
