Changing Scenario of India’s Business Environment:

A Lesson To Bangladesh

Abstract

India is poised to become the world’s fastest growing major economy in 2015, reports our 2015 India Attractiveness survey. Economic fundamentals stand strong, and global interest is on a steady upswing. The election of a pro-reform Government and its various initiatives - Make in India, Digital India and 100 Smart Cities - have added to increased optimism. India has emerged as the number one FDI destination in the world during the first half of 2015. With FDI capital inflows of US$30.8b, India has outpaced all other economies, moving up to the premier position from being in the fifth spot during the corresponding period of the previous year. A leading 32% of the investors ranked India as the most attractive market this year, while 60% placed the country among the top three investment destinations. Manufacturing has regained its share in FDI capital flows in 2014, amounting to approximately 46%. Investors are most optimistic about the sector, with 62% of those interested to expand or enter India over the next year, saying that they plan manufacturing activities. Within six months of its announcement, 55% of our survey’s respondents were aware of the Make in India program and 69% of those who are aware of the initiative are likely to invest in manufacturing in the next five years. Business leaders find India’s macroeconomic and political stability, FDI policy and ease of doing business more attractive in 2015, compared with EY’s 2014 India attractiveness survey. Investors see India speeding up pace toward becoming one of the world’s top destinations for manufacturing, as well as a regional hub for operations. A number of recent government reforms are being well received by investors, who expect them to increase India’s FDI attractiveness significantly. Bangladesh offers opportunities for investment under its liberalized Industrial Policy and export-oriented, private sector-led growth strategy. All but four sectors (i.e. arms and ammunition and other defence equipment and machinery, forest plantation and mechanized extraction within the bounds of reserved forests, production of nuclear energy, and security printing and mining) are open for private investment in Bangladesh. Therefore India has got opportunity to invest in Bangladesh.