E&Y, India has issued new guide on "Doing Business in India" and accepted India as the second most attractive destination for foreign investors.
Guide states that the
Indian economy successfully weathered the global financial crisis,
thereby proving its resilience and depth. This, along with the India's
liberalized foreign exchange regime, has attracted large MNCs to invest
in the country.
The
study highlights that India is one of the most attractive destinations
for FDI, only being second to China, which leads the chart. Some
highlights of the report are as follows:
- FDI inflows in India from FY05 to FY11 has risen to 31.5%, reaching a figure of INR885 billion.
- The study suggests that the aerospace and defence industry is an emerging market in India, with the Indian military expected to spend roughly US$80 billion over the next four to five years. About 65–70% of India's defence requirement is imported from global aerospace and defence companies.
- Automotive is another profitable sector in India for foreign investors, as the barriers to entry into this segment are relatively low and setting up operations is fairly easy without the need for industrial licenses.
- Banking is another key sector where the aggregate limit for all foreign institutional investors (FIIs) is restricted to 24%, which can be raised to 49% with the approval of the board/general body.
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