India slips in FDI reckoning

Updated: Jun 7 2014, 11:35am hrs
Foreign investors are wary of committing long-term money in India as the AT Kearneys FDI Confidence Index for this year shows that the country slipped to its lowest position since 2001. From being the second-most favoured FDI destination beginning 2005 till 2012 (barring 2010), Indias ranking slipped to 5 last year and further down to 7 this year amongst 25 countries analysed by the global consulting firm. The US topped the confidence index for the second year in a row and China retained its second position from previous year.Over two years of policy paralysis at the Centre, retrospective tax amendments, and a spate of litigations and stuck projects have eroded foreign investors confidence from India. FDI inflows into India dropped from an all time high of $46.6 billion in FY12 to $36.4 billion in FY14 and almost half of the cumulative investments from April 2000 to March 2014 are from from Mauritius and Singapore, better known as tax havens. In contrast, the US accounts for just 5.5% and Japan about 7.5% of the total FDI inflows into India. The new government will have to put in place policies to attract FDI as there is a renewed confidence regarding global economic recovery amongst investors.

FDI India