FDI Confidence Index

By : Neha Dhyani

Updated : Mar 28, 2022, 7:40

Foreign Direct Investment (FDI) Confidence Index is an annual report published by Kearney, a leading global management consulting firm.

The Kearney FDI Index is a survey of global business executives ranking the markets on the basis of their attractiveness for investments in the coming years.

The first-ever report from the firm was released in 1998. This index is created with the use of data sourced from a proprietary survey of executives working in top corporations of the world.

FDI Confidence Index - Definition and Explanation

FDI Confidence Index is essentially an analysis of how a given country's FDI is affected by the economic, regulatory, and political changes in the next three years.

The index ranks markets on the basis of preferences of top executives for making a direct investment. Kearney's index is different from other data on FDI flows as it gives a forward-looking analysis of the markets investors are likely to target.

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Foreign Direct Investment [FDI]

Foreign Direct Investment (FDI) is defined as a company's equity investment in another company in a different country.

The FDI Confidence Index contains detailed information on how a market's investment attractiveness is impacted by various global trade issues.

The firm prepares an index of 25 countries every year based on the survey results to suggest the top markets attracting investor interests.

The companies participating in the survey are mostly from Fortune Global 500 and should have annual revenue of over $500 million.

FDI Confidence Index 2021

In the FDI Confidence Index 2021, the top five ranks were held by developed economies like in previous years. The first spot is held by the United States for the ninth year in a row. Canada ranks second and Germany maintains the third position on the index.

The top 25 rankings include only three developing economies namely Brazil, the UAE, and China. The report also shows the shift in investor attitude as business leaders are highly optimistic about Canada, Japan, Switzerland, and Germany as per the survey in 2021.

India could not manage to secure a position on the FDI Confidence Index for the second time. The country could get the 16th rank in the 2019 report while it held the 11th spot in 2018.

In 2017, India could manage to be in the top ten on the index. India's fall in ranking can be due to challenges faced in the implementation of the GST and the demonetization of 2016 which could have deterred the investor sentiments.

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FAQs on FDI Confidence Index

Q.1. What is India's position on Kearney's FDI Confidence Index?

India has failed to secure a position in the FDI Confidence Index for the second time in 2021.

Q.2. How frequently is the FDI Confidence Index published?

The FDI Confidence Index is prepared annually from a survey of business executives from around the world ranking markets that are likely to attract the most investment in the coming three years.

Q.3. Which country tops the FDI Confidence Index in 2021?

The United States ranked first on the index in 2021.

Q.4. Who publishes the Foreign Direct Investment (FDI) Confidence Index?

The Foreign Direct Investment (FDI) Confidence Index is published by Kearney, a world-leading management consulting firm established by Andrew Thomas Kearney.