KPMG survey: India lags behind China in corporate investment

KPMG survey: India lags behind China in corporate investment

By The Statesman
Asia News Network
Published on June 21, 2008

India is likely to witness the largest growth in its share of overall foreign investment over the next five years and should become the world leader for investment in manufacturing.

But it is China that will corner the biggest chunk of corporate investment by 2013 to 14, moving ahead of even the United States, global think-tank KPMG said in its latest survey.

"As investments go global, the smart money is increasingly finding its way from the traditional investment destinations of the US and Europe to the BRIC countries [Brazil, Russia, India and China]," KPMG India chief executive Russel Parera said. "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."

However, though the growth of Indian investment scenario is overwhelming, it is way behind China, already acknowledged as a major new economic power that is expected to receive funds from 24 per cent of corporate investors globally, the KPMG survey titled "Global Corporate Capital Flows 2008-09 to 2013-14" showed.

China is expected to overtake the US as the world's leading recipient of corporate investment and should become the most influential country in information technology, telecom, industrial products and mining.

"India is expected to lead the world in terms of investment in the manufacturing sector with 25 per cent of corporates expecting to invest five years from now and is projected do particularly well in industrial products, where it will displace the US to take second place behind China," the survey showed.

The global survey was

carried out by KPMG International and corporate-investment strategists from more than 300 of the largest multinational companies in 15 major economies. They were asked where they plan to invest in the next 12 months and in five years time.

"It is significant to note that 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," KPMG India tax and regulatory services head Sudhir Kapadia said.