The Telegraph
Since 1st March, 1999
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FDI surge in back-office hub

New Delhi, Sept. 17: India has emerged as a prime offshore location for high-tech activities, says the latest foreign direct investment (FDI) confidence index by global consultancy major AT Kearney.

The study has pointed out that services sector investors have ranked India as the fourth most attractive destination this year, up from 14th in 2002. The FDI confidence index is based on an annual survey of executives from the world's largest companies.

“Even though business process outsourcing forms a small percentage of the economy, it has done wonders for India's image in the global firmament,” said a spokesperson for AT Kearney.

As a leading offshore location, India received investments from GE Capital, American Express, Citibank, Conseco, British Airways, Dell Computer and Reuters, resulting in a development of call centres, back-office support and facilities to handle knowledge-intensive activities such as risk modelling and financial analysis, the study said.

The study has taken note of the plans by Microsoft and Oracle to expand their software development operations in the subcontinent.

In the overall ranking for the most attractive FDI destination, global investors upgraded India from 15th to the sixth position this year. India had achieved a similar rank in 1999.

The study points out that the country’s low-cost, English-speaking, IT (information technology) savvy labour force coupled with a large market potential have resulted in the improved outlook and investment confidence.

The country's English-speaking population is valued by the American, Canadian and British investors. The American and British investors ranked India third and the Canadians placed it in the fourth position.

European and Asian executives view India more favourably this year, ranking the country as 10th and 11th, respectively.

According to the study, one out of ten global investors committing FDI to new markets will enter the Indian market within the next three years.

However, foreign direct investment in India still remain significantly lower than China, which has emerged as the most preferred location widening its lead over the US and other investment destinations worldwide.

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