February 4, 2023 3:05 pm


Over the next 5 years, India has a possibility to attract $475 Billion says EY CII reports

Almost 71% of MNCs working in India identify India as an important destination for their global expansion.

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A Majority of MNCs (Multi-National Companies) believe that India has the capacity to perform significantly better in terms of investments in the next 3-5 years. The optimism has been driven by both short-term and long-term investments where 71% of MNCs working in India identify India as an important destination for their global expansion.

According to a report by Confederation of Indian Industries-Ernst Young titled, “Vision-Developed India: Opportunities and Expectations of MNCs” says that India has an optimistic growth for Foreign investments, with a potential FDI flow of $475 billion expected in the next five years”.

It further said, “Despite the impact of the pandemic and geopolitical developments on investment sentiment, FDI inflows into India have been consistent over the last decade, with FY2021-22 receiving an FDI inflow of US$ 84.8 billion”.

The report stated that over 60% of MNCs in the business environment have improved in the last three years and praised the impact of GST, the government’s digital push in various spheres, and tax transparency, among other reforms. 

“As the business environment continues to improve, MNCs would like to see enhanced effectiveness of the national single window for approvals/clearances; greater tax certainty; and a stronger contract enforcement mechanism, among other measures,” it said.

A UN report of 2021 says that despite so many Challenges of the Pandemic and other humanitarian issues related to the Russia- Ukraine war. India manages to come into the top 10 Global economies for FDI.. India Stands in the 7th position after South Africa. Besides receiving USD 64 billion in FDI in 2020 and recording a decline in FDI inflows in 2021 at USD 45 billion. 

The country’s emphasis on structuring modern Free Trade Agreements (FTAs) to boost trade and create cross-border investment opportunities is also well received by MNCs, with 82% supporting trade initiatives because they expect them to create new opportunities. 

MNCs anticipate momentum on faster infrastructure projects execution, continued improvement in ease of doing business, additional tax reforms, and more trade agreements as a result of ongoing reforms.

They also advise the Governments to prioritise infrastructure projects and timelines, particularly for the PPP (private partnership project) and the development of competitive business through the DESH (Development of enterprise and service hubs) initiative.

Confidence in India’s potential stems from fast economic growth, strong consumption trends, digitalization, and a growing service sector, as well as the Government’s strong focus on infrastructure and manufacturing,” said the CII Director General. The Indian government’s consistent efforts to reduce regulatory barriers are also contributing to MNCs ‘positive perception.

Asha Kumari
Asha Kumari
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