Auto sector, a big morale booster
It is good news that India comes on top in BPI 2015 with growth forecast up and perception of corruption down. Ranking of destinations for attractiveness to foreign investors has placed India at the top among 110 countries. This is based on an index for baseline profitability that assumes the three factors that determine the ultimate success of foreign investments – generation of return, erosion of return and repatriation of return. All these three factors make India’s rank in three parameters. Also there is a clear indication of economic revival with multinationals making an investment of $1 billion in the Indian capital markets so far in July. Also, India has moved up to the 55th place on a global index of most competitive economies for 2015-16.
Overall, India’s positive outlook is attibuted to the Prime Minister’s ‘Make in India’ initiative. This popular campaign, which promises to streamline doing business in India and create a globally competitive nation, has generated optimism among manufacturing circles and tallied numerous successes so far in 2015. Foreign direct investment soared 27 per cent in the first quarter of the current year.
Since the Indian economy is overall driven by its strength on manufacturing sector, particularly the automotive industry, there is huge investments in the pipeline to make the ‘Make in India’ dream come true. For instance, Mercedes-Benz, the German auto giant, has shown interest by proposing an investment of Rs. 1,000 crores for production of luxury cars. Besides, Renault-Nissan, Hyundai Motor India and Daimler’s BharatBenz are constantly investing in India not only for the domestic market but also for export. Many more companies are considering moving production into the country to better reach India’s 1.25 billion consumers.
Foxconn said it will spend $5 billion on 12 new factories in India by 2020. Ford Motor Corporation has opened a 460-acre integrated manufacturing plant in Gujarat. Bosch, General Electric, Panasonic and Tejas have committed to invest in manufacturing clusters in India.
The World Bank projects India will emerge the world’s fastest-growing economy during 2015-17 with an average GDP growth of 7.4 per cent.