News: ‘GDP growth lures foreign investors'

(IANS 03/12/2006) New Delhi - India, with a growth of over 8% per annum, is emerging as the most-preferred destination for foreign investors, a survey by a leading business chamber says. In a survey by the Federation of Indian Chambers of Commerce and Industry (Ficci), 83% of foreign firms are considering expansion, while 71% hope the country will surpass the 8% GDP growth by March 2007.

A majority of foreign investors have achieved their growth target set for their India business, said the survey, adding that 91% of the companies making profits have been able to meet their profitability targets.

With more and more companies bringing in their assembly lines and setting up manufacturing units here, India is becoming a coveted place for investments.

India, with its young population, is an attractive destination for investment in comparison to other developing countries, including China, where the one-child policy has resulted in an older workforce. The perception of India as a manufacturing base has reasonably improved over the past two years, with 48% of foreign companies rating India as an attractive manufacturing base.

In the first quarter of the current financial year, the manufacturing sector grew by 11.3%, yielding India’s highest first-quarter growth of this decade, pegged at 8.9%.

However, the survey points out that there are a number of serious challenges that are slowing down the economy, including a visible shortage of skilled and qualified manpower and infrastructure problems.