Thirty-two per cent of international investors see India as a favourite destination for investment, according to a survey by business consultancy Ernst & Young.
The survey shows investor optimism about India is at an all-time high.
India is followed by China, Southeast Asia and Brazil in attractiveness for investments.
The E&Y’s 2015 India Attractiveness Survey was conducted from March to April 2015 among 500 decision-makers from MNCs from a range of sectors.
More than 80 per cent of respondents cited low labour costs and the vast domestic market of India as a major incentive for investing money.
Of these, 62 per cent of investors want to invest in manufacturing in India to serve the Indian and global export markets.
The increased interest in investing in manufacturing is also reflected in FDI inflows, which showed a 62 per cent increase in 2014 compared with the previous year, ahead of the 31 per cent growth in the services sector FDI.
“We are driving one and three-year action plans across ministries so that we all work as a team to make India a manufacturing destination,” said Amitabh Kant, secretary of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.
“Aided by measures taken in this year’s budget, we will see India become a nation of young innovators.
I believe that India will see a huge number of startups in both digital and manufacturing in the years ahead, and that India will become a nation of job creators rather than job seekers,” he said.
To promote entrepreneurship in the country, the government has introduced several initiatives this year.
About 90 per cent investors gave a thumbs up to infrastructure projects and the plan to create 100 “smart cities” that would attract most FDI.
Despite the government’s controversial bans and communal violence, 74 per cent (up from 59 per cent from 2014) global business leaders believe political and social stability in the country has improved.
“We are determined to make India an extremely easy and simple place to do business. Our first priority is to do away with the many procedures and rules, followed by bringing in consistency and clarity in all our policies and tax regime and developing a world-class infrastructure,” Kant said.