Foreign investors are convinced about India's growth potential, global ratings major Fitch's Indian unit chief said, adding that much of the investments will start pouring in after the general elections.
"There are some investors already setting up plants here and putting money into other businesses, although there are some who have pulled back and are waiting in the wings," India Ratings' Atul Joshi said.
"These investors want to see how the reforms unfold in the coming months. But most of the investors are saying that once the elections are over, we will come in."
"The questions are only about the timing of the investments and not about the investments as such," Mr Joshi added.
The general elections are scheduled for the first half of 2014.
"That (the decision to invest in India) is a done deal. What they are questioning is whether this is the right time to come in or if should they wait for 12-18 months," the India Ratings chief said.
"These are the questions right now before most of the overseas entities planning investments in the manufacturing and services sectors," he said.
For months, there has been a debate on whether foreign companies are shying away from India due to the lack of economic reforms and uncertainty over policy matters.
Mr Joshi, however, ruled out any large-scale exit of foreign investors from the country.
"If one was to simply go by the FII (foreign institutional investor) inflows in the last two months, the money is coming in big time. So, I don't think that FIIs are not convinced about our growth prospects," he said.
Mr Joshi said various estimates put India's economic growth rate for the next fiscal year in the range of 6-6.5 per cent, while Fitch also pegs it at about 6.1 per cent.
"People are still talking about economic growth, that too for an economy size of USD 1.8 trillion which is huge by any standards. If you look at any of the luxury brands from across the world, the destination is India. The who's who of the world -- in businesses like automobile, consumer goods, luxury products, or private jets -- are all coming to India as demand is very strong here," Mr Joshi added.
Mr Joshi said trends in (FDI) foreign direct investment have been a mixed bag, but the outlook remains bright except for some existing uncertainties.
"There are two kinds of investors right now. One set is getting in already as it has accepted that this is how it is in India, be it the work culture or approval processes. At the same time, there is another set of investors saying that it does not want to take any chances. They (the investors) are ready to wait for 12 months or 18 months and let things be sorted out and then come in."
About global markets, Mr Joshi said that the US may see a temporary slowdown due to expenditure cuts, but employment has started looking up there.
"If you look at US banks, some of them have been able to perform better and they have been able to recoup from the worst levels they saw around 2008. In Europe, the problems are not entirely over as yet, but somehow the ECB (European Central Bank) has been able to restore confidence. So, we are seeing investor confidence returning in the US and Europe... whether or not it will stay, we need to wait and watch."
"Overall, the underlying tone has been about some sort of a recovery in the global economy," he added.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
