India “increasingly viable” investment destination: EIU | The Financial Express

India “increasingly viable” investment destination: EIU

According to the report, the dominance of the ruling BJP carries its own political risks, but from an investors’ perspective, it also offers policy continuity and means there is little chance of a change in administration.

India “increasingly viable” investment destination: EIU
India has risen to the 52nd spot in EIU’s global business environment rankings, from 62nd five years earlier, and now ranks above China.

India’s business environment is now competitive with that of China and South-east Asia and the country could attract more foreign investments, the Economist Intelligence Unit said in a report. Improvements in India’s business environment and progress in bilateral trade deals make it an increasingly viable investment destination,” said EIU’s Asia Outlook 2023.

India has risen to the 52nd spot in EIU’s global business environment rankings, from 62nd five years earlier, and now ranks above China.

“Higher political risk in South-east Asia will present India with an opportunity to capture more attention from global manufacturers,” it said.

In 2023, India’s presidency of the G-20, as well as the probable conclusion of bilateral trade agreement negotiations with Australia and the UK, will further help to highlight investment opportunities in the country.

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According to the report, the dominance of the ruling BJP carries its own political risks, but from an investors’ perspective, it also offers policy continuity and means there is little chance of a change in administration.

However, it has an obvious advantage in terms of a large and youthful labour market, while there has been incremental progress in addressing weaknesses in terms of transport infrastructure, taxes and trade regulation, the report further said.

Developments on ground also seem to support India’s attractiveness as an investment destination. The production linked incentive scheme has helped accelerate investment in the electronics sector, the report said, noting that Taiwan’s Foxconn is among the suppliers to Apple (US) to be planning significant expansion in India.

India’s electronics exports rose by around 50% to $ 14 billion in 2021 and had already matched that value over the first nine months of 2022.

The report comes even as agencies have revised downwards India’s GDP growth projections for 2022-23 and expect growth to slow down further next fiscal.

On Wednesday, the Reserve Bank of India slashed GDP growth forecast for the current fiscal by 20 basis points to 6.8%.

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First published on: 09-12-2022 at 01:00 IST