Foreign investors in India to expand operations

By Staff
|
Google Oneindia News

New Delhi, Dec 3: Bolstered by the 9.2 per cent growth in GDP of India, 83 per cent of the foreign investors in the country are planning expansion of their operations even as they expect the GDP growth to surpass eight per cent mark in the current fiscal.

According to FICCI's annual Foreign Direct Investment (FDI) Survey 2006, seven out of 10 foreign investors are making profits in their Indian operations. Of these, 91 per cent say they have been successful in meeting their profitability targets in India.

The survey took into account the views of 76 current foreign direct investors, across various industries and verticals, having their operations in India with company turnover ranging between Rs 1 crore to Rs 100 crore and those with turnover above Rs 100 crore.

According to the FICCI report, an overwhelming 87 per cent of the respondents echoed the view that there exists opportunities for greater FDI in India.

It noted that the perception about India as a manufacturing base has reasonably improved over the last two years. In 2005, about 32 per cent of the participating companies rated India as an attractive manufacturing base. In the present survey this proportion has increased to 48 per cent.

The proportion of respondents citing 'intense competition' as a characteristic feature of the Indian market has gone up from 59 per cent in 2005 to 67 per cent in the survey this year.

It also found that with many new players entering the Indian market and with both domestic and foreign players in a scaling up mode, a noticeable crunch in the availability of skilled manpower has been reported. The proportion of respondents citing availability of skilled manpower in the country as 'good' has fallen from a high of 67 per cent in the last year's survey to about 52 per cent in the present survey.

Although the foreign investors have expressed some concern about the availability of qualified manpower in country, the investors have a very good opinion about the skill sets possessed by individuals in their respective organisation's executive management, professionals and operations management cadre.

The survey noted that in terms of satisfaction with the efforts made by the government to attract greater FDI into the country, current investors gave the government machinery a rating of 'average'.

There has been a sharp increase in the proportion of respondents rating government efforts to attract FDI as 'average', from 43 per cent in 2005 to 83 per cent in the survey this year, from several companies suggesting government should improve its performance in terms of its outreach efforts to court foreign investors.

A look at the evaluation of the infrastructure facilities in India by the foreign investors showed that foreign investors are most dissatisfied with the condition of roads and highways in the country.

Fifty-four per cent of the companies have rated the condition of roads and highways in the country as 'bad'. The situation of power and ports also deserve careful attention of the government with 42 per cent of the participating companies rating the quality of power and port facilities in the country as 'bad'.

UNI

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