Capital inflows to India set to skyrocket: KPMG
20 June 2008
Mumbai: India is ready to witness the largest growth in foreign investment and become the world leader in investment in manufacturing, according to a study by advisory firm KPMG.
''As investments go global, the smart money is increasingly finding its way from the traditional investment destinations of US and Europe to the BRIC countries," said Russell Parera, CEO, KPMG India. "The more recently recognised India opportunity is reflected in the fact that a significant amount of investment into India in the next five years is expected from first time investors. The expected increase of Indian investment in the Middle East reflects the proximity and the opportunity created from the oil price led wealth effect. India must continue to build on its investment climate to monetise this sentiment.''
The results show a move away from investments in the US, Japan, Singapore and the UAE, and a big increase in flows to Brazil, Russia, China and India (BRIC).
Commenting on the findings of the survey, Sudhir Kapadia, head of tax and regulatory services, KPMG India, said, "This survey validates anecdotal evidence suggesting a major shift of capital flows from the US, Japan and other European countries to the BRIC countries in the next five years. It is significant to note while 10 per cent of the companies surveyed expect to invest in India currently that number will go up to 18 per cent in five years-the biggest gain amongst all other BRIC countries.''
''Further an increasing proportion of investments will flow into industrial products and manufacturing in India - Interestingly 64 per cent of the investment into India is expected to come from new entrants to the country.''
''It is clear that India has the potential to play an even more influencing role in flow of capital and it's a great opportunity for India to further improve the economic and fiscal climate and proactively attract and retain investments in her growing economy. Indeed India Rising is all set to fulfil her tryst with destiny that Nehru spoke about in his. Independence speech and occupy her rightful place in the comity of nations", he added.
