India has emerged as one of the top five investment destinations in the world, primarily on account of large market size and high customer potential, says a survey.

Notwithstanding bullish business prospects, the survey also said that India is perceived as a risky place to make investments.

The consulting firm BDO Global Market Opportunity Index 2012 covered more than 1,000 senior finance officers spread across 14 countries, including India, the US and the UK. The survey examines the views of the company’s finance chiefs to expand in specific countries.

In terms of investment destinations, India continued to be at the fourth spot in the list topped by neighbouring China. Other nations in the top five are the US (second), Brazil (third) and Germany (fifth).

The survey attributed India’s appeal as attractive investment destination to its large market size, customer potential and cheap labour.

About India, the survey said that the professional services and technology, media and telecoms (TMT) sectors are driving investment in the country.

Besides, planned investment in India is fairly consistent as 32 per cent of Cheif Financial Officers (CFO) surveyed in Saudi Arabia expect to enter this market.

Among others in the top 10 are Russia, the UK, Australia, United Arab Emirrates and Mexico.

“The ‘big seven’ (China, USA, Brazil, India, Germany, Russia and UK) lead the index as attractive investment markets, due to size and customer potential... (these nations) are the ones that CFOs feel most comfortable investing in,” the survey noted.

This year 66 per cent of the CFOs surveyed are setting their sights on a ‘big seven’ of attractive investment destinations.

Besides, CFOs across the globe are finding it more difficult to conduct business overseas — certainly compared to three years ago on account of poor economic situation, increased regulation and greater competition.

Notably, CFOs consider parts of Europe as risky as the politically unstable countries of the Middle East. Spain is perceived as a riskier investment destination than Egypt.

Besides, Greece is seen as more risky than Libya and Syria.

Iran is being seen as most risky to invest in by CFOs, followed by Iraq, Greece, Syria and Libya.

Interestingly, three of the four BRIC countries are considered among the top 20 risky markets, Russia ranks ninth, China 13th, and India 20th. This shows that, while BRIC countries are seen as attractive markets for investment, they also come with some inherent perceived risk.

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