Lack of infrastructure major business risk in India: survey

April 11th, 2008 - 7:27 pm ICT by admin  

Ahmedabad, April 11 (IANS) “Inadequate infrastructure” is one of the principal risk factors the companies face while doing business with India, according to the latest annual survey on the international operations of Japanese firms, conducted by the Japan External Trade Organisation (Jetro). The survey was conducted between November 2007 and January 2008. Jetro received replies from 733 firms in manufacturing and trading sectors, or 27.9 percent of the 2,626 companies to whom the questionnaires were sent.

The companies, which participated in the survey, spoke of their expansion plans in China and views on business environments in Asia, a JETRO press release said.

India was ranked highest in “inadequate infrastructure” category with 53.5 percent while Vietnam was voted next at 50.3 percent. The other major constraint identified in the survey was “lack of clustering of development of related industries”. In this category India was ranked second after Vietnam.

China was at the top of the list for “tax-related risks or issues”, at 28.9 percent, followed by India (12.5 percent). India’s high figure suggested that the respondents find the country’s tax system complicated, the survey noted.

In the section of positive features of Asia’s business environment, China and India were ranked highest in the “size of the consumer market” and “potential for growth of the consumer market” categories.

Vietnam was atop the “low business costs” category, at 40.8 percent, followed by China (25.6 percent) and Indonesia (23.9 percent).

Singapore came first in the “high education level” category, at 42.3 percent, followed by India at 17.6 percent. This reveals the companies’ positive view regarding India’s higher education system on which the country’s software and related industries have been built.

The majority of respondents (70.9 percent) have overseas bases, of which 77.9 percent have bases in China, 52.9 percent in the US and 39.4 percent in Thailand.

The survey also said 66.4 percent respondents were planning to expand their international operations compared to the 50.2 percent who have domestic expansion plans. China remained the most-preferred destination for most of the companies.

Vietnam, India, central and eastern European countries and Russia and other Commonwealth of Independent States (CIS) ranked higher in sales and production functions, reflecting the firms’ increased interest in investing in these emerging countries/regions.

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