New Delhi, November 9, 2009– There is a growing consensus that India represents one of the most promising emerging economies of the future. However, to propel the Indian economy towards a new phase of growth, the report - “Multinationals and India: A plan for progress” highlights the need to overcome outstanding obstacles to inspire business confidence. Accenture (NYSE: ACN) launched their report at the Confederation of Indian Industries (CII) National Conference on MNCs in India: Partners in Sustained Economic Growth.
The report, an interview-based research, dwells on some of the ongoing challenges facing multinational businesses in India and underscores priority areas for reform—such as rationalizing taxation, safeguarding intellectual property and reducing bureaucracy, amongst others. It also highlights some of the new growth opportunities in India, such as biotechnology, renewable energy and emerging technological sectors like cloud computing and digitization. Lastly, it outlines key actions that can help enhance the nation’s overall productivity and position India at the heart of the global economy.
While India has been at the vanguard of emerging markets that have redrawn the world’s economic geography, comparisons with other economies confirm that India still faces a number of challenges in achieving greater competitiveness. According to the World Economic Forum’s Global Competitiveness Report 2009-10, India stands at the 49th position and in comparison to emerging economies it ranks in the 23rd position. And while a comparable number of the world’s 50 largest companies operate in China and India, their combined turnover in China is three times that in India.
“We found that while India has vastly benefited from increased FDI inflows and impressive growth rates, it still faces many impediments in areas such as infrastructure, education and healthcare that are holding it back from competing effectively with other emerging economies. To climb the competitiveness ladder, it is crucial for India to broaden its skills base beyond a few centres of excellence and foster innovation on a national scale. MNCs will have a critical role to play to sustain high economic growth in the future, both in terms of driving inward investment and through the potential positive effects they have on education, skills and innovation.” said Harsh Manglik, Chairman and Geography Managing Director, Accenture India
Commenting on the findings of the report, Ravi Venkatesan, Chairman, CII National Committee on MNC and Chairman, Microsoft India, said, “A combination of these challenges results in unexpected delays and higher costs for businesses—discouraging many MNCs from setting up and expanding in India. Addressing these inhibitors now could not only spur investments, but also help differentiate India from competing economies. The central and state governments have already been implementing a range of laws and measures to remove regulatory and procedural barriers associated with the establishment of MNCs in India. We hope to see a continued momentum in this direction to launch India into the next phase of growth, and position it ahead of the other BRIC economies. "