CII-Kearney survey sees MNCs investing more in India

18 July 2005

New Delhi: According to a survey by CII-AT Kearney, most multinational companies (MNCs) have shown an interest in making long-term investments in India, but found the country less attractive when compared to China.

Nearly 70 per cent MNCs, which participated in the CII-AT Kearney MNC Survey 2005, are ready to pump in more money into India in medium to long term, and most of them indicated that they are doing so irrespective of their current performance.

India's market potential, labour competitiveness and macro economic stability were unanimously highlighted as the key drivers of FDI attractiveness.

Out of every four MNCs, three stated their performance in India has met or exceeded internal targets and expectations, the survey said. More than three-quarters of the survey respondents ranked India higher than Malaysia, Thailand and the Philippines in terms of MNCs performance.

Though close to 50 per cent of the survey respondents believed that India is on a par with or better than China in terms of MNC performance, 75 per cent of them viewed India unfavourable compared to the communist nation on FDI attractiveness, says the survey.

Investors favour China over India for its market size, access to export markets, government incentives, favourable cost structure, infrastructure and macroeconomic climate.