Even country like China, considered as a miracle economy clocking double-digit GDP growth on a sustained basis for three decades, has started slowing down. The ranking for destinations for attractiveness to foreign investors has placed China in 65th position and ever green economy United States in 50th position this year.

With investors better protected, ease of doing business improving considerably and political stability under Prime Minister Narendra Modi, the situation is expected to only improve further for foreign investors. There are already signs of increased flow of foreign investment in the country. India attracted investment worth $35 billion in 2014-15, a record in recent years after the global economic crisis of 2008. China, which used to attract foreign investment to the tune of $120 billion annually has started slowing down and those investors are knocking at the doors in India because this is the only country with huge market with over 400 million middle class. This middle class is likely to grow further with more than half of 1.2 billion population below the age of 35.

The fact that Hong Kong has slipped in the ranking went to show there is likely to be further slowing down of foreign investment into China. With Europe and Japan in a depression mode and the population ageing, the investors will have to look to India as the demand is growing rapidly only in this country particularly due to rural consumption demand growing in the face of successful implementation of social programmes.

The ranking, created by Daniel Altman, who is an Adjunct Professor at New York University's Stern School of Business, is based on an index for baseline profitability. Baseline profitability assumed three factors that affected the ultimate success of a foreign investor. They are how much the value of an asset grows; the ease of repatriation of proceeds from selling assets and the preservation of the asset value when it is owned.

The ranking based on an index that combined these three factors showed “Narendra Modi's India is the place to start,” Altman was quoted as saying. It is not mere economic growth that determines investments by foreigners but also factors like financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls and exchange rates.

In all these areas there are improvements ever since Modi government came to power in May 2014. A high ranking in this index meant high returns to foreign investors and improving economic institutions.

Also raising of FDI caps in Insurance, Pension, Defence and realty by Modi government besides easing of FDI norms in several other sectors has ensured several enquiries and billions of dollars of investment commitment from countries, like China, Japan, France, Canada and Germany particularly in infrastructure development including energy sector. This would only further improve foreign investment flows into India. The defence sector has already shown several investment proposals particularly from France, Germany, United States, Russia, Britain and Israel. The investment in defence sector will have spin off in auto and aviation sectors in the country as well where India is already attracting foreign investors.

With Indian economy already in recovery mode when several advanced economies are in recessionary trend, Finance Minister Arun Jaitley is right in saying the best for the economy is yet to come. With indirect tax collections growing by a whopping 40 per cent in the first quarter of this financial year, indications are that demand is picking up rapidly and one would not be surprised if GDP growth achieved double-digit growth in the coming years. Just as we have overtaken China in annual economic growth rate, it is quite possible that India attracted more FDI inflows than China annually in the coming years. (IPA Service)