Foreign investor confidence in the Indian market has hit a ten-year low, according to a study by AT Kearney.
The global consulting firm confirmed India slipped to seventh on its foreign direct investment confidence index for 2014, the Asian nation’s lowest ranking since 2001. India had been ranked second in 2012 and fifth in 2013.
The finding comes after a more than a year of limited investor interest in the country’s multi-brand retail sector. While the Indian government moved to allow 51 per cent foreign direct investment (FDI) in supermarket chains in 2012, leading multinational retailers have been reluctant to make their move into the market due to a number of complex requirements, which were amended in August last year.
British retail giant Tesco became the first foreign company to formally seek permission to enter the supermarket sector in December 2013, through a 50:50 venture with the Tata group. US-based Wal-mart had previously operated a wholesale venture with Bharti Enterprises.
For the second straight year the US topped AT Kearney’s confidence index, which is based on a survey of 300 business executives.
“In addition to being the most likely destination for FDI, no other country has experienced as profound a change in the expectations of the business leaders we surveyed,” the report concluded.
“A full 49 per cent of respondents – compared to 39 per cent in 2013 and 23 per cent in 2007 – indicated that their outlook for the United States is significantly more positive now than it was two years ago.”
