India moves up in FDI

India moves up in FDI
ENS ECONOMIC BUREAU

NEW DELHI, FEB 13: India has moved up to seventh position in AT Kearney's foreign direct investment (FDI) confidence index in the current year as against eleventh position last year. The report launched in London places USA on top of the list, closely followed by China, Brazil, UK, Mexico, Germany and India.

FDI confidence on India was better than that on Japan and the Asian Tigers including South Korea, Singapore, Taiwan, Thailand, Malaysia and Hong Kong. About 85 per cent of the Chief executives of top 100companies in the world also intend to direct three-fourths of their FDI committments to developing economies like India, Brazil, China and Mexico, the report said.

"The FDI `flight to quality' trend that emerged from the Asian financial crisis has expanded to include the robust emerging markets, driving investors' attention primarily towards Brazil, China, Mexico and India," A T Kearney vice president Paul Laudicina said launching the report.

Despite dampended global economic optimism and concern over US economy, global executives are likely to increase their investments abroad. "Undeniably, central bankers need not fear that irrational exuberance persists and the global economic outlook has dimmed substantially compared to a year ago. Our expectation is that FDI flows will continue to grow albeit at a slower pace," Ludicina said.

India ranked second among countries experiencing "the largest sentiment shift" this year compared to year 2000 with Mexico topping the list. Mexico and India were followed by China, Argentina,Brazil and Indonesia in terms of the positive shift in outlook for FDI.

On the whole the Asia-Pacific region ranked above other continents and markets in terms of preferred destination of "planned first time investment". "China's increased attractiveness and mounting interest for first time investments in Asia invigorate the region's future prospect," the report said.

Singapore and Taiwan also improved attractiveness of investments in the Asia region. "The Asian Tigers seemed to have regained their roar, "Laudicina said noting that this year's index clearly establishes Asia's return to investors' favour.

The top executives also indicated that Asian emerging markets are being considered as destinations for nearly a third of all intended first time FDI over the next one to three years.