WEF Highlights: India Replaces Japan As One Of The Most Attractive Global Markets For Investments
PM Modi meets Justin Trudeau
At the recently concluded World Economic Forum (WEF) 2018 held in Davos, the current Indian Prime Minister Narendra Damodardas Modi made his very first appearance at the annual forum. Speaking in front of the world’s key leaders and policy makers, Modi went out of his way to pitch India as the newest predictable, stable, and transparent investment destination in the world. And many can say his sales pitch was well established, as well, since behind his words stood a new survey of CEOs by global consultancy PwC, which put India in the top 5 most attractive market for investments in the world.
According to the survey, CEOs all over the world still favored US as the top investment destination, followed by China, Germany, and the UK. This year, India claimed the 5th spot, bumping off Japan from the top 5 list.
“Most of our clients are optimistic about their growth. The government has made efforts to address concerns around areas like infrastructure, manufacturing, and skilling, although newer threats like cybersecurity and climate change are beginning to play on the minds of our clients,” said PwC India Chairman Shyamal Mukherjee.
This global positive outlook on India comes after two key developments were made in the country this year under Modi: the rise of cashless transactions and the reforms made in India’s Foreign Direct Investment (FDI).
“In this direction, we have also undertaken bold FDI reforms. More than 90 percent of the FDI approvals have been put on the automatic approval route. As a result of these changes, there has been a sharp rise in FDI in the past three years from $36 billion in 2013-14 to $60 billion in 2016-17,” Modi noted at his speech at the WEF.
In addition to the already low wages, and special foreign investment privileges such as tax exemptions, many FDI norms across many sectors such as telecom, power, stock exchanges, and oil refineries were seen to be more relaxed in the recent years. And the spike of investments from many countries all over the world prove the strength of India’s global market potential.
Some 15 Japanese companies including Toyoda Gosei, Moresco, and Murakami have signed memorandums of understanding to invest in Gujarat last September. France-based energy firm Engie SA and Dubai-based private equity firm Abraaj Group are setting up wind power platforms in India. US-based Skechers is opening 400-500 exclusive outlets in India, while Waltermart is setting up 30 new stores across the country. Toronto-based Canada Pension Plan Investment has increased their business in the country, totaling an astounding $3.5 billion. The government has also approved FDI proposals from Oppo, Louis Vuitton Malletier, Chumbak Design, Daniel Wellington AB, and Actoserba Active Wholesale. China, one of the biggest markets in the world, have increased their footprint in India so much that FDI inflow from China to India in 2016 have reached over $2 billion.
Bob Dudley, CEO of London-based multinational oil and gas company BP, is a huge investor in India and in an interview with ET Now, commended Modi’s aggressive pitch to invite investors to his country. “I think it is absolutely appropriate for a country like India that is growing so fast with a young population full of great potential. It is good for the world...Under Prime Minister Modi, I have seen a very big change. I see the enthusiasm and encouragement for it so it feels easier and we are making big commitments to invest billions of dollars now.”
Sectors with the highest demand for new recruits in India are now health care (71 percent), technology (70 percent), business services (67 percent), communications (60 percent), and hospitality and leisure (59 percent).
Modi ended his speech at the WEF with a welcome to invest in his country, saying, “I invite you all if you want to have wealth with health, then work in India. If you want peace with prosperity, then stay in India. Modi ended his speech at the WEF with a welcome to invest in his country, saying, “I invite you all if you want to have wealth with health, then work in India. If you want peace with prosperity, then stay in India. If you come to India, you will always be welcome.”