Davos, Jan 20: India has emerged as one of the five most promising markets for businesses globally as it offers one of the best opportunities for both domestic as well as global companies, says a survey.
According to the annual global CEO survey of consultancy giant PwC released here at the WEF Annual Meeting, the top five markets considered as most important for overall growth prospects by the respondents are USA, China, Germany, the UK and India.
"India, which has continued to do well under Prime Minister Narendra Modi's pro-business government, is now among CEOs' five most promising overseas markets," said the survey which covered 1,409 CEOs spread across 83 countries.
It further noted that the confidence level among Indian CEOs remains higher than the global average although they have also become less confident since last year about the growth prospects of their own companies.
As per the findings, CEOs are less optimistic about prospects this year and those who think global growth would improve over the next 12 months have declined to 27 per cent from 37 per cent seen in 2015.
Further, those who think the situation would worsen have increased to 23 per cent from 17 per cent.
"Against this tide of pessimism, CEOs in India (64 per cent), Spain (54 per cent) and Romania (50 per cent) stand out as more optimistic," it said.
PwC India Chairman Deepak Kapoor said CEOs in India have given strong indication of general uplift in sentiments by showing much more confidence than their global counterparts when it comes to revenue growth for their companies.
"Recent policy reforms and a consequent pick up in investment and the government's aim to boost infrastructure are also playing a role in boosting CEO confidence," he noted.
However, Kapoor said the CEO community continues to be concerned by lack of infrastructure and over-regulation. As many as 90 per cent of the Indian CEOs cited inadequate basic infrastructure as a major threat and 80 per cent mentioned exchange rate volatility and 77 per cent cited over-regulation.
"Of business threats, 81 per cent stated availability of key skills, 79 per cent stated speed of technological change, 78 per cent stated bribery and corruption," the survey said.
"With India as the fastest growing large economy in the world, it offers one of the best opportunities for both Indian and global companies in a world that is still coming to terms with a slower growth paradigm and increasing geopolitical uncertainty," he added.
With respect to the global economy, 39 per cent of Indian executives expect an improvement whereas the global average is 27 per cent.
Around 75 per cent of Indian CEOs believe there are more growth opportunities for their companies today than three years ago.
About countries most important for their companies' growth in the next one year, 54 per cent said it was the US while 29 per cent respondents mentioned China and 23 per cent went for the UK. As many as 56 per cent of the Indian executives plan to implement a cost-reduction initiative over the next 12 months.
While 70 per cent anticipate increase in head count during the same period. When it comes to disruptive trends in their industry most likely to transform wider stakeholder expectations over the next five years, 80 per cent of the respondents cited technological advances followed by demographic shifts (64 per cent) and shift in global economic power (55 per cent).
Around 64 per cent of Indian CEOs felt the government had been ineffective in achieving greater income equality. About 51 per cent thought that the government had been ineffective in reducing environmental impacts as well as in achieving a clearly understood, stable and effective tax system.
"93 per cent of Indian CEOs agree that tax is a business cost that needs to be efficiently managed like any other business cost... 87 per cent agree that a stable tax system is more important than low rates of tax," it said.
Around 81 per cent agreed that reducing administrative burden of tax is as beneficial as reducing tax rates. With 79 per cent of CEOs concerned about over-regulation, it remains the biggest concern and is followed by geopolitical uncertainty.
The latter comes at a time when terror attacks are increasing and touching every part of the world, many linked to the heightened conflict in Iraq and Syria.
"Global conflicts are also connected to anxieties about social instability and readiness to respond to crises, named by 65 per cent and 61 per cent of CEOs, respectively.
"Cyber security is also a worry for 61 per cent of CEOs, representing as it does (pose) threats to both national and commercial interests," the survey said.
As many as 66 per cent of the CEOs see more threats for their companies than it was three years ago, the report said.