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Foreign cos upbeat on India: Survey
By agencies
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Monday, 15 August 2005, 19:30 IST
NEW DELHI: Upbeat on Indian market conditions, foreign investors are making profits from their India operations and see opportunities for greater FDI inflows, but are wary of infrastructure facilities, which could affect the country's attractiveness as a manufacturing base, a FICCI survey has said.
In FICCI's Annual Survey on FDI, investors also spotlighted the need for building ''Brand India'' and showcasing India's potential as an investment destination.
An overwhelming 70 percent of the foreign companies are reported to be making profits from their Indian operations and 84 percent of the surveyed companies gave a ''positive'' assessment of India, up from 40 percent in 2003, highlighting increased attractiveness of India for investment.
The survey, released by FICCI President Onkar S Kanwar, said foreign investors expressed satisfaction with the operational parametres.
They, however, expressed concern about the quality of infrastructure facilities.
FICCI contends that inadequate infrastructure coupled with inflexible labor laws, incidence of indirect taxes and multiplicity of procedures is holding down India's attractiveness as a manufacturing base or an export platform.
Eighty four percent of the participating companies are planning expansion of their Indian operations and 91 percent of the respondents see opportunities for greater FDI in their own industry sector.
''India's ever-growing popularity as a source of skilled IT and BPO workforce is reflected by the fact that 90 percent have rated India's attractiveness on this front as 'high','' said the survey.
India is, however, yet to catch the eye of foreign investors as an export platform or a manufacturing base, with attractiveness on these two fronts being rated as 'high' by only 34 percent and 32 percent respondents, respectively.
The respondents to span from small, medium and large companies and include representatives from banking, financial, IT and other services, electrical machinery and equipment, auto, textile, agriculture and other sectors.
FICCI has also identified seven thrust sectors where opportunities exist for greater FDI inflows. These are - electrical equipment, machinery and apparatus, chemicals and chemical products, electronic equipment, banking, financial, IT and other services, auto and its components, textile and apparel, agriculture and related services.