India has emerged as one of the top investment choices for multinational companies planning to invest in the next 2-3 years, according to a FDI survey conducted by the Confederation of Indian Industry (CII), in association with EY.

The CII-EY FDI survey titled, “How can India step up its game?” showed that more than 80 per cent of the respondents and 71 per cent of the non-Indian headquartered respondents plan to make investments globally in the next 2-3 years. About 30 per cent of companies are planning to invest more than $500 million.

First choice

About 50 per cent of respondents see India amongst the top three economies or leading manufacturing destinations of the world by 2025. For more than two-thirds of the MNC respondents, India is the number one choice for investments. As many as 25 per cent of the respondents, who represent non-Indian headquartered MNCs, view India as the first choice for future investment, the Survey showed.

The respondents have pinned down market potential, skilled workforce, and political stability as the top three reasons to make India their favoured destination. Other key factors are of India as an investment destination include cheap labour, policy reforms, and availability of raw materials, the survey added.

According to the survey, 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.

Investment hotspot

“The CII-EY survey results strongly indicate that India will be the next global investment hotspot with a high proportion of MNCs placing it at the top of their investment agenda. The recent major structural reforms, proactive government processes and the quick pickup in economic activity following Unlock measures are contributing to global investor interest,” said Chandrajit Banerjee, Director General, CII.

Infrastructure development, faster clearances, and proper implementation of the improved labour laws and labour availability are the top three issues that the companies want the government to focus on, followed by R&D and innovation, and tax reforms.