This means a considerable number of European companies consider that they have successfully set up base in the Indian market over the past five years.

India ranks ahead of Singapore, Argentina, Mexico, Korea and Japan in the mega-survey of 515 executives in pan-European companies. As many as 44 executives felt that their company had established themselves in India during the vital liberalisation years.

This is contrary to the feeling frequently expressed by critics of Indian foreign investment policy and government action that India is an unfriendly destination for investment.

The survey, called the "European Cities Monitor 1998" was conducted by Healy & Baker, a member of the leading global realestate consultancy firm, Cushman & Wakefield.

As a matter of fact, India, with 44 favourable respondents, leads major emerging markets such as Singapore (43 respondents), Argentina (41 respondents), Mexico (32 respondents), Indonesia, Korea (28 respondents), Malaysia (27 respondents), Vietnam (27 respondents), Japan and South Africa (23 respondents), Australia (22 respondents) and Thailand (20 respondents).

However, the study establishes that executives in Europe's leading companies regard China as the most exciting location for business, and in spite of the recent turmoil in the financial markets, are still strongly attracted to the Pacific Rim countries and to Moscow.

The top five European cities for business were London, Paris, Frankfurt, Brussels and Amsterdam, a group which was exactly identical to last year's survey.

For the first time, Frankfurt has taken over from London as the perceived future financial capital of Europe. However, says the survey, this may be interpreted as a warning to thecity of London, that Britain's decision to stay outside the first wave of European Monetary Union may discourage investment.

The direct foreign investment component in India's foreign exchange reserves of around $26 billion is in the region of $15 billion, although it is believed that the cumulative foreign investment over the last five years is much higher.

The Indian liberalisation process has frequently been criticised both within and outside the country by observers as too little too late, and some Cassandras have suggested that India has not sufficiently penetrated the consciousness of multinational companies, and is not a favoured destination for investment.

However, the Healy & Baker survey clearly shows that India has not been entirely amiss in its liberalisation drive, and that at least in Europe, there is considerable positive perception of the country as an investment destination where companies have found it possible to establish themselves securely.