India among most attractive destinations for MNCs

India has emerged as one of the favourite investment destinations for multinational companies. A survey of over 100 MNCs conducted jointly by industry body CII and Ernst Young showed more than two-thirds of them favour India as their number one choice for future investments.

At least 25% of MNCs, who do not have their headquarters in India, viewed India as the first choice for future investments. About 30% of them planned to invest more than $500 million.

Half of the respondents of the survey saw India among the top three economies or leading manufacturing destinations by 2025.

The respondents said market potential, skilled workforce, and political stability as the top three reasons to make India their favoured destination.

"The CII-EY survey results strongly indicate that India will be the next global investment hotspot," said CII director general Chandrajit Banerjee.

"Key factors which contribute to the attractiveness of India as an investment destination include cheap labour, policy reforms, and availability of raw materials.

"Recent reforms in the country such as corporate tax cuts, ease of doing business measures, simplification of labour laws, FDI reforms, and focus on human capital have emerged as the top drivers for fresh investments," the survey listed.

India’s ambitious plan to spend Rs 113 lakh crore in upgrading its infrastructure and 100 Smart Cities have been attracting MNCs, which do not have headquarters in India, the survey data showed.

For 40% of the non-India headquartered companies, effective implementation of labour laws and FDI reforms emerged as most significant, while 52% of them believed corporate tax rate reduction would be the prime mover of future investments.

However, future investors said they would like to see trade policy reforms and faster turnaround time for exports and imports, improved cargo handling, and trade facilitation measures to be in place.