Chief Financial Officers (CFOs) from Europe and the US see India as an attractive investment destination, with its appeal lying in market size, higher growth rates, and access to new customers.
While China tops the league of most attractive investment destinations, India ranks fourth in a global survey.
Four in every ten global CFOs plan to invest in India next year. 10 per cent say they plan to enter the Indian market, and 24 per cent has plans to increase their investments in India. Another 6 per cent plan to keep investments at the same level, according to the BDO Ambition Survey, which surveyed CFOs from mid-sized companies planning foreign expansion.
Euro Zone crisis
Though CFOs from Europe and US see India as an attractive investment destination, some 5 per cent of those surveyed said they are more likely to invest in India as a result of the Euro Zone crisis.
“The findings indicate that the BRICs are now perceived as established, rather than emerging, investment markets,” said Shailesh Haribhakti, Chairman, BDO India, the Indian firm of BDO International, which is the fifth largest accountancy network globally.
CFOs see investment in India as coming with some risks — finding the right local people, corruption and ethics. Both factors are almost at par with 36 per cent of global CFOs seeing a big challenge in finding the right talent, and 35 per cent CFOs finding corruption a major impediment.
Despite all the flaws, India is seen as a focus for general expansion by 16 per cent of the CFOs.
The survey also points out global economy dominates expansion plans for Indian CFOs, although political instability is also a concern. One in three Indian CFOs see currency fluctuations as the biggest risk faced by their companies when expanding internationally, and 22 per cent see the economic slowdown as the biggest risk.
Indian CFOs have reported the highest rise in their companies’ international revenues over the past year, an average of 18 per cent, compared to 9 per cent globally, according to the BDO survey.