Survey: India Proves Positive For Many Multinational Investors

Jan. 13, 2005
By Agence France-Presse More multinational companies feel the investment climate in India is positive rather than negative, although bureaucracy remains a major concern, according to a survey released May 29. Indeed, 40% of 135 respondents rated the ...
By Agence France-Presse More multinational companies feel the investment climate in India is positive rather than negative, although bureaucracy remains a major concern, according to a survey released May 29. Indeed, 40% of 135 respondents rated the investment scene in India as positive, according to the survey of investors by the country's leading industrial lobby, the Federation of Indian Chambers of Commerce and Industry (FICCI). However, 16% of the multinationals gave a negative assessment, including Nestle, Hyundai , Ford, Du Pont and Reebok, the survey said. The rest of respondents were neutral. More than 60% of the multinationals said they made profits from their Indian operations and another 9% said they were breaking even. But the survey found an overwhelming 96% of multinationals viewed procedural delays and red tape as a serious problem. Most companies also were unhappy with India's infrastructure, especially roads and power. Yogendra Modi, senior vice president of FIICI, said investors continued to have a negative perception of India dating from before liberalization began in the early 1990s. Modi blamed the Indian government for not marketing the right image aggressively. The sectors rated by multinationals as highest in growth potential were consumer goods, IT and related services, chemicals and automobiles. Among positive factors contributing to growth of investment were the overall government policy and the availability of skilled labor, the survey found. Modi noted that India still lagged behind other Asian countries including China, Malaysia and Thailand. He identified China's infrastructure and flexible labor laws as the main factors in attracting better foreign direct investment. Copyright Agence France-Presse, 2003

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