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India beats U.S. as FDI hotspot
By agencies
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Friday, 09 December 2005, 20:30 IST
NEW DELHI: For the first time, India has beaten the U.S. as the second most preferred FDI destination in the world. The U.S. has slipped to the third place.
An annual survey of executives from the worlds largest companies by AT Kearney ranked India second only to China, which retained its top slot for the fourth time in a row. India scored1.951 on a scale of 0-3.
Paul Laudicina, Managing Director of AT Kearneys global business policy council said, India is on the cusp of an FDI take-off. However for India to harness manufacturing investor interest and evolve into an FDI capital intensive hub, the government must maintain its reform orientation and over come narrow business interest.
The optimism about India is being attributed to factors like financial services investors upgrading the country from the fourth to second most attractive FDI location, relaxation of ownership restrictions in telecom and positive developments in heavy and light manufacturing industries as well as in the wholesale and retail sectors despite uncertainty about liberalization.
India led the list of countries with the highest level of investor optimism with over 47 percent investors expressing a positive change in outlook as compared to a year ago.
The corporate world also felt that these Asian giants are together fast emerging as the most preferred R&D destinations, challenging traditional locations in the industrialized world.