New Delhi: India’s focus on reforms and economic growth will create USD 475 billion in foreign direct investment (FDI) prospects over the next five years, according to a report.

According to the ‘Vision ‘Developed India’ Opportunities and Expectations of MNCs’ survey done jointly by EY and CII, 71% of MNCs viewed India to be an appealing investment destination for their worldwide expansion, while 96% of respondents were optimistic about the Indian economy in the long run.

The influence of the GST, the government’s push toward digitalization in different areas, and tax transparency, among other measures, are all valued by multinational corporations (MNCs).

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As per the poll, the optimism is fueled by both short-term expectations, with the majority of MNCs believing that the Indian economy will perform much better in the next 3-5 years.

“India’s reforms focus and economic growth gives rise to FDI opportunity of USD 475 billion in the next five years,” the EY-CII report said.

Despite the effects of the pandemic and geopolitical developments on investment attitude, FDI into India has increased steadily over the past ten years, reaching an all-time high of USD 84.8 billion in FY2021–22.

“It (India) is seen as an emerging manufacturing hub in global value chains, a growing consumer market, and a global leader in the digital transformation of government and private sectors alike,” EY India Partner, Tax & Regulatory Services Sudhir Kapadia said.

The top expectations from the government, according to the survey, are to continue reforms to improve the ease of doing business, accelerate the implementation of infrastructure projects, hasten the closure of free trade agreements, and reform GST.

The MNCs also cited investments in the health and education sectors, competitive business cluster development through the DESH programme, and reforms in the power sector as additional reform priorities.

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According to the survey, India recently overtook Germany to become the fifth-largest economy in the world. With the rapid pace of economic growth, it is predicted that India will surpass Germany in 2025 to become the fourth-largest economy and surpass Japan in 2027 to become the third-largest economy in the world, behind the US and China.

Up to 64% of those surveyed claimed that the ease of doing business on the ground has increased. MNCs are particularly excited about the effects of the GST, the government’s push toward digitalization in a number of areas, and tax transparency, among other measures.

The National Monetization Pipeline (NMP), which has an aggregate monetisation potential of Rs 6 lakh crore through the sale of core assets of the Central Government, and Gati Shakti offer immense potential for investments by the private sector as well, according to the EY-CII Survey. The National Monetization Pipeline (NMP) has an aggregate monetisation potential of Rs 6 lakh crore through the sale of core assets of the Central Government.

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