Indian business environment continue to deter foreign investors: UN-ESCAP

Sep 26,2014   10:35 Hrs IST

Elements of the Indian business environment continue to deter foreign investors, according to Economic and Social Commission for Asia and the Pacific, UN-ESCAP, which also expects the macroeconomic uncertainties and structural constraints in India to continue to concern foreign investors. According to the commission, the country currently is experiencing slower economic growth, high current account deficit, and enduring high inflation and pointed that despite this the foreign direct investment inflows into India have grown by 16.5% to $28 billion in 2013. However, pressing upon the growing need for FDI, the commission in its Asia-Pacific Trade and Investment Report 2014, highlighted that with reforms of investments there would be a potential for attracting higher rates on investments in India and that higher FDI could help strengthen the economy and provide incremental level of productive employment, besides encouraging technological up-gradation. Additionally, the commission also highlighted that many sectors continue to retain the equity limits on foreign ownership, which is quite usual and that finding suitable joint venture partner could risk hampering FDI inflows. It pointed that FDI cap of 51% in the multi-brand retail was a major obstacle in the FDI inflows to the sector and that foreign investors have been awaiting positive signals from the new government, which was elected in early 2014.