By IANS,
New Delhi : India is likely to register the largest growth in attracting foreign investment worldwide, and is poised to become the global leader for investment in manufacturing, according to a report by international consultancy KPMG released Thursday.
“Respondents expect India to do particularly well in industrial products, where it will displace the US to take second place behind China, and in manufacturing, where it is expected to lead the world in terms of investment, with 25 percent of corporates expecting to invest five years from now,” the report said.
“India will move from seventh to fourth in the investment league table, overtaking the UK, Germany and France,” it said.
In terms of influence, India is expected to achieve the remarkable feat of overtaking Japan, France, Russia and Brazil in the ranks of the most influential countries, with rising influence in all sectors, particularly business and consumer services, IT, telecom and manufacturing.
The report paints an optimistic outlook for India, saying its share of international corporate investment is expected to rise by 8 percent to 18 percent over the next five years, the largest increase recorded in this survey.
“By contrast with the other BRIC countries, in the next year 64 percent of the investment into India is expected to come from new entrants to the country,” the report said.
Investments would move away from the US, Japan, Singapore and the UAE, to Bric nations – Brazil, Russia, India and China.
According to the survey, the US currently leads by a long way, with 27 percent of investors planning a significant investment in the country in the next 12 months.
China comes next, with 17 percent, followed by the UK with 14 percent, Germany with 13 percent, Russia with 12 percent and India at seventh place with a 10 percent share.
“In five years’ time, however, China is expected to head the table, with 24 percent planning an investment, followed by the US with 23 percent and Russia with 19 percent. Fourth, and the biggest winner overall, will be India with 18 percent, a rise of 8 percent,” the report said.
Indian business expects the bulk of its investment in year 2008-09 to go to the US (35 percent) with 15 percent expecting to invest in West Asian countries and 10 percent in Singapore and Hong Kong.
In next five years, for Indian corporates, the US stays popular with 25 percent, and West Asia with 15 percent, but countries of the Asia Pacific region can expect an increase in investment, with Singapore, Australia, and Malaysia the choice of 10 percent of respondents, along with South Africa.
“It is clear that India has the potential to play an even more influencing role in the flow of capital and it’s a great opportunity to further improve the economic and fiscal climate,” Sudhir Kapadia, head of KPMG’s tax and regulatory services in India said.