FDI in India

FDI to flow into new areas:

India will become a global leader in education, R&D, innovation and a producer of high value-added goods and services by 2020, attracting foreign capital in new areas of growth, international consultancy firm Ernst & Young has said in its latest report. 

In order to take India to the next level, collaboration in infrastructure, education and healthcare between corporations and government will be important.

India will see foreign direct investment (FDI) in sectors other than low-cost sectors such as BPO units. The findings are based on a survey of more than 500 global business leaders late last year.

Between 2003 and 2010, the number of FDI projects increased by 7% and jobs created by FDI increased by 4% annually,” the report said. FDI as a share of GDP grew from 0.03% in 1991 to 3.5% in 2008 before falling in 2009 due to the global financial crisis.

Most multinationals are also expecting to expand their operations in India to capitalise on over 8% GDP growth. FDI will be more in states, which has, better infrastructure and transparency.

According to the survey 60% of the respondents think China is India’s main competitor as far as attracting foreign funds is concerned.