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US businessmen say India could be an investor's delight only if…

Despite India being an investor's paradise, business houses in the United States are reluctant to invest there due to bureaucratic wranglings, lack of feasible infrastructure and widespread poverty, concludes a recent study by an American management consulting firm.

However A T Kearney, in its survey of American executives, is optimistic on India's potential as an 'investor's delight' as soon as 'obstacles' are reduced or overcome.

Though the Indian government commits itself to increasing the share of foreign direct investment, the study suggests that the country may not be able to realise this promise unless substantial changes were made in the investment environment, A T Kearney vice-president Paul A Laudicina said.

Laudicina said that 67 per cent of the executives surveyed were positive about India as an investment destination and 61 per cent of the companies with existing investments in the country said they are likely to add to those investments.

But among the companies without investments in India, only 14 per cent talked as 'high' the likelihood of their making investments in India. In fact, a full 71 per cent of companies without existing investment in India said their likelihood of investing there was very low.

Mindless bureaucracy tops the list of obstacles to foreign direct investment in India, say 39 per cent of executives. Another 28 per cent cite slow pace of reforms as the main deterrent, while 8 per cent cited the government involvement in the economy and 6 per cent rampant corruption in bureaucracy as deterring factors.

Other problems identified are poor infrastructure (17 per cent) cultural barriers (11 per cent) and poverty and income disparity (8 per cent).

On the positive side, nearly three out of four respondents said that Indian domestic market is perceived as sufficiently large to meet investors' requirement, besides its skilled workforce.

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