India out of top 10 in FDI Confidence Index 2018

According to an "AT Kearney" a management consulting company report, India has fallen out of 10 top countries in FDI Confidence Index 2018, with standing at 11th position in terms of attractiveness, India's rank in the index was 8th in 2017 and 9th in 2016.


The report also finds "Troubles in Implementation of GST" and "Demonetization" responsible for the decline in rank in the short term, 2016 demonetisation disrupted business activity to slow down economic growth, yet India remained the second-highest ranked emerging market (EM).

According to the report reforms like removing the Foreign Investment Promotion Board that have maintained India's high rankings in terms of FDI attractiveness and liberalising FDI limits in key sectors like retail, aviation, and biomedical industries may be responsible for the decline in the rank.

The report also sighted political risks such as China abolishing presidential term limits and the upcoming general election in India has made potential investors cautious to monitor these development before investing. However both China and India still remains the highest-ranking emerging markets on the index.

Improved ranks of tax havens such as Cayman Islands and Hong Kong indicates that major corporations and individuals are willing to park their earnings in small-sized tax jurisdictions with low corporate tax rates, Bahamas, Liechtenstein and Luxembourg are also included in the category.

Closer scrutiny by the government of India on traditional FDI source nations has shifted the flow of equity investments to other nations.


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