KPMG predicts a Capital Inflow Deluge

India is likely to see the highest growth globally in investment in the manufacturing sector over the next five years as investors shift focus to emerging economies in the wake of financial turmoil in the US and Europe, a KPMG survey said . About 25% of global corporates who participated in the survey expected to invest in India’s manufacturing sector. Investment in industrial goods sector would also be large, with India expected to displace the US to stand at the second rank after China, it said.The survey covered over 300 corporate investment strategists from 15 major economies who were asked where they plan to invest in the next 12 months and in five years’ time. The respondents were also asked which countries they saw as dominant in their sector and which they expected to be dominant in 2013-14.The survey showed a move away from investments in the US, Japan, Singapore and the UAE, and an increase in flows to Bric economies. About 10% of the companies surveyed expected to invest in India and this number would go up to 18% in five years. Over the next five years, India will move from seventh to fourth in the investment league table by overtaking the UK, Germany and France. The US remains the favourite investment destination for Indian companies. The majority of domestic firms that responded to the survey expected the bulk of Indian investment this year to go to the US, while the Middle East, Singapore and Hong Kong will also see substantial investments from India.