Financial Daily from THE HINDU group of publications
Wednesday, Sep 25, 2002
Financial Daily from THE HINDU group of publications Wednesday, Sep 25, 2002 |
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Industry & Economy
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Foreign Direct Investment India slides in confidence Our Bureau
NEW DELHI, Sept. 24 AFTER international credit rating agency Standard & Poor's downgrade of India's long-term rupee debt to "junk", here comes further blow to the country's efforts in bolstering foreign direct investment (FDI) inflows. India has slipped eight spots to the 15th position in the index rankings of the latest Foreign Direct Investment Confidence Index released by the global management-consulting firm A.T. Kearney. A.T. Kearney's FDI Confidence Index is constructed on the basis of the response received from the senior management (board-level positions) of the Fortune 1000 companies. The simmering conflict with Pakistan over Jammu and Kashmir undoubtedly deters foreign investment on the one hand, while budget deficits and poor infrastructure have further constrained India's attractiveness on the other, said A.T. Kearney. According to the latest confidence index report, India would now have to face a nearly 20 per cent decline in the likelihood of receiving FDI. India's attractiveness has, however, improved significantly among non-financial services, whose investment likelihood increased by 28 per cent over 2001. Post-September 11, India's high-quality and low-cost IT talents have attracted more IT-related outsourcing services. In other industries, telecom and utilities investors consider India as their 25th most attractive investment destination. Among investor nations, although India's ranking drops among most, its position among Japanese investors and US is holding steady. According to the findings of the FDI Confidence Index, China has overtaken the US as the most attractive foreign investment destination.
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