India’s Investment Appeal Stays Bright: Findings from EIU Report

April 4, 2024 Posted by India Briefing Written by Archana Rao Reading Time: 3 minutes

India is among the top three most improved investment destinations, according to a recent report from the Economist Intelligence Unit, which attributes the country’s appeal to its domestic market size and workforce capacity.

According to a report by the Economist Intelligence Unit (EIU), Greece, Qatar, and India have made significant strides globally in providing conducive environments for businesses over the past year. India ranks third in the list of most improved countries, benefiting from its youthful demographic, which promises strong demand and a skilled labor force.

According to the EIU, its “proprietary business environment index not only includes quantitative forecasts such as growing market opportunities, but also incorporates hard-to-measure indicators with strong predictive power, such as likely upcoming policy changes, demand from key trading partners and changes in the institutional environment.”

India’s business landscape accommodates enterprises of all sizes, from small-scale ventures to large industries. Additionally, the World Bank has forecast robust economic growth for India. As of April 4, 2024, the World Bank has raised its projection for India’s economic expansion in 2024 to 7.5 percent, marking a 1.2 percent increase from previous estimations.

India a “big improver” in the EIU index

The EIU anticipates robust economic growth for India from 2024 to 2028, with an increasing number of foreign investors seeking alternative manufacturing destinations beyond China as they diversify their supply chains.

Greece’s notable improvement in the business environment stems from policy reforms by a pro-business government, while Argentina’s adoption of free-market programs under President Javier Milei has boosted its standing.

Most Improving Geographies in the Business Environment Rankings
Country	Change in score	Rank (2024-28)
Greece	1.38	34
Argentina	1.32	54
India	1.08	51
Angola	1.01	78
Qatar	0.93	26
Kenya	0.93	68
Dominican Republic	0.74	57
Venezuela	0.73	82
Luthiania	0.72	28
Serbia	0.72	52

Source: EIU

Other findings of the EIU report:

Singapore, Denmark, and the U.S. are the top three global business destinations for the next five years.
Greece, Qatar, and India are among the notable “big improvers” in the index.
Singapore has maintained its top position for 16 consecutive years, attributed to its political stability and government support for technological advancement.
Denmark and the U.S. follow Singapore, with Denmark offering solid macroeconomic fundamentals and advanced infrastructure, while the U.S. provides favorable market opportunities with few restrictions on foreign trade and investment.
Germany and Switzerland rank fourth and fifth, respectively, with Canada, Sweden, New Zealand, Hong Kong, and Finland completing the top 10. These countries are considered safe investment options due to their advanced economies and consistent performance.

The EIU’s ranking evaluates the attractiveness of business environments across 82 countries and territories based on factors such as inflation, cost of living, economic growth, and fiscal policies.

READ: India’s Outlook for 2024-25: Key Growth Areas and Investment Prospects

Sweden betting big on India

Identify the Optimal Investment Destination with Cross Country Competitiveness Benchmarking ⟶

Jan Thesleff, Sweden’s ambassador to India, stated earlier this year that the nation has become a popular place for Swedish companies to make investments.

According to Thesleff, India is one of the top options for Swedish businesses seeking to increase their footprint in Asia. Sweden conducts a business climate assessment in about 50 countries worldwide each year. The poll, which is administered to Swedish businesses, asks the participants about the business environments, difficulties, and advantages of setting up shop in various nations.

India’s business market was labelled with the highest level of favorable sentiment in the most recent poll conducted by Business Sweden. Eighty-six percent of respondents to Business Sweden’s 2023 Global Business Climate Survey said that the business climate in India was either good or very favorable, which is a gain of over 20 percentage points from 2022.

India received US$2.38 billion in foreign direct investment (FDI) from Sweden between 2000 and 2023, according to Invest India, the government’s trade development and investment promotion agency. The industries that draw the greatest investment include automotive, industrial machinery, electrical equipment, and metallurgy. In November 2023, Swedish aerospace and defense company SAAB was given permission to set up a manufacturing facility to build Carl Gustaf M4 rockets, with 100 percent FDI.

READ: Risks for US Businesses in Emerging Asian Markets in 2024

India Inc. confident about the economy: PwC survey

Despite three years of global macroeconomic headwinds — including a pandemic that severely impaired businesses and conflicts in Europe and West Asia — India remains on track to see stable growth. This is backed by various surveys and reports, including the PwC CEO Survey 2024. In its survey of 4,702 CEOs across 105 countries and territories, 79 of whom were from India, the outlook towards India is upbeat. Indian CEOs note that reinvention in the private sector will be driven by changing customer preferences, climate change, and technology disruption – necessitating innovation in products and services and forming strategic partnerships. Overall, they are confident about India’s upward economic trajectory and corporate earnings.

1US$= INR 83.40

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