India becomes most attractive investment destination: BPI 2015
India has become most attractive investment destination in world after it was ranked first among 110 countries in a ranking of destinations for attractiveness to foreign investors.
The ranking was based on baseline profitability index (BPI) 2015. In this edition of China was placed at the 65th position and US was placed at the 50th.
India has emerged as top investment destination in BPI 2015 compared to previous 6th position held in the 2014 index. It should be noted that high ranking in this index indicates high returns and improving economic institutions.
India was able to top in this edition of BPI because of high growth forecasts, perceptions of corruption down and investor friendly polices of Union Government led by Prime Minister Narendra Modi.
About Baseline profitability index (BPI)
- The ranking based on a BPI is determined by assuming three factors which affect the ultimate success of a foreign investment.
- These factors are how much the value of an asset grows; the ease of repatriation of proceeds from selling the asset and the preservation of that value while the asset is owned.
- The index combines measures for each of these factors into a summary statistic to determine country’s basic attractiveness for investment.
- Thus, this index compares how local conditions and policies affect the same investment in different countries. It also helps to determine the value of the principal and the return will change depending only on where the investment is made.