India will see one of the fastest improvements in business climate, study says

India is among the top three economies that will see the biggest improvements in business climate over the next five years, which may eventually lead to a surge in real gross domestic product (GDP), investment spending and foreign direct investment (FDI), an Economist Intelligence Unit (EIU) survey showed.

The EIU study ranked India third, behind Greece and Argentina, in its list of countries that will see the most improvement in their business environments.

The country is likely to further improve its FDI policy, foreign trade and exchange controls, and tax regime, the study showed.

While Greece is likely to improve its business environment score by 1.38 to be ranked 34th, Argentina will better its scores by 1.32 to claim the 54th rank, while India may raise its score by 1.08 to be ranked 51st, the study said.

The EIU study took into account 82 countries and territories.

Singapore, with a total score of 8.56 out of 10, will be the territory with the best business environment over the next five years, while Denmark came second with a total score of 8.41, and the US was placed in third spot with a score of 8.40. Germany and Switzerland rounded off the top five with scores of 8.35 and and 8.33, respectively.

While Qatar and India will see fast-paced real GDP growth in 2024-28, they, along with the others on the list will see the most significant policy improvements,
infrastructure investment or growth in market opportunities, the EIU study said.

The study said India has additional factors working in its favor.

“India is the only single-country market that offers a potential scale comparable to that of China. India’s youthful demographic profile promises both strong demand and good labor availability,” the study said.

“Alongside solid economic fundamentals, digital infrastructure and favorable demographics, more policy support is being introduced to attract manufacturing investment,” it said.