US remains top investor in India

http://www.moneyspidery.com/2012/01/30/us-remains-top-investor-in-india/

New Delhi, Jan 30 : The uncertainties in global economic climate notwithstanding, foreign investors see India as an attractive investment option.

‘Ready for the transition’ Ernst & Young’s 2012 Indian Attractiveness Survey, reveals that overall the number of foreign direct investment (FDI) projects increased 25 per cent to 864 (valued at $50,813 million) in the 11 months to November, up from 691 projects ($44,874 million) in 2010.

Where has the FDI investment come from? The US remains the leading investor in India, both in terms of projects and jobs generated. There was a 30 per cent increase in the number of FDI projects compared with 2010 and rise of 31 per cent of investment projects (1,282), with more than 316,900 jobs created between 2007 and November 2011, the survey shows.

This report was released at the World Economic Forum at Davos today.

Japan, second largest investor

Japan and the UK, the second and third largest investors respectively, also saw an increase in FDI projects by 45 per cent and 22 per cent compared to last year, reflecting the slight improvement in the global economy since 2008 and 2009.

The only investor country to have experienced a decline in the number of projects was the United Arab Emirates with a 27 per cent drop. Yet, it still remains among the top 10 investors.

Job creation

South Korea and China are the primary rapid-growth Asian economies that invest in India. These countries have lined up several big-ticket investments, particularly in the metals and mining space. Chinese investors have invested in 62 projects, creating more than 36,200 jobs since 2007, primarily in the manufacturing and technology sectors.

Between 2007 and 2011, an average 401 jobs were created per project by rapid-growth Asia-Pacific countries (excluding Japan), more than North American (245) and Western Europe (249). South Korea created on average 692 jobs per project while China created 584 jobs per project, far ahead of India’s current Western investors.

More than three-fourth of companies with international presence that were polled remain convinced about India’s prospects and plan to strengthen their operations in the country. Two-thirds of the respondents are planning to implement projects in the near to short term.

The survey combines an analysis of foreign direct investment into India, along with a survey of more than 500 global executives on their views about the potential of the Indian market.