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E&Y survey: Majority of multinational biz expanding in India
January, 24th 2011

Majority of the multinational businesses surveyed are expanding their operations in India to capitalise on the country's robust domestic demand, according to global consultancy Ernst & Young.

The survey also found that a major chunk of business leaders believe that India would become a global leader in "education, R&D, innovation and as a producer of high value-added goods and services" by 2020.

The findings are based on a survey of more than 500 global business leaders conducted late last year.

"Half of all the survey respondents and 75 per cent of those already present in India are increasing operations there by expanding facilities or head counts," E&Y said today.

According to the report, these activities would also help India to attract more Foreign Direct Investment (FDI) in the coming years.

"... domestic demand is expected to grow exponentially. India's young demographic profile also helps it provide an increasingly well-educated and cost-competitive labour force.

These factors put India in a good position to attract an increasing proportion of global FDI ," E&Y India's Country Managing Partner Rajiv Memani said.

However, the survey also revealed that India needs to expand its infrastructure, provide high-quality education to more people as well as continue with business-friendly policies to boost the country's attractiveness as an investment destination.

Going by the respondents -- including those from European, North American and Asian businesses -- China is expected to be India's main competitor in terms of business appeal.

"The strong potential of is domestic market enabled India to deliver a resilient performance during the global economic slowdown. It is today emerging as a manufacturing destination, both for the domestic and global markets.

"As business leaders compete for growth in the new economy, there is a sense of urgency among our survey participants to seize the prospects offered by the Indian market," E&Y India's Partner and Markets Leader Farokh Balsara said.

 
 
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