UK companies are looking to India as the most promising destination for increased international trade investment over the coming years, according to a new report.

Published by EY, the study ranked India as the most attractive investment destination in the world for the next three years, based on the views of 500 decision-makers from multinational organisations, including more than 50 business leaders from UK-based companies.

It was indicated that 32 per cent of business leaders from global corporations said India is the most attractive investment destination, rising to 36 per cent among UK-based investors. It edged out China and Brazil for top spot, with 63 per cent of UK respondents ranking the country among the top three investment destinations in the next three years.

Around 60 per cent of UK-based companies are looking to enter the Indian market or expand their existing operations in the region over the next year, following a 600 per cent increase in UK foreign direct investments to India in the first six months of 2015.

Key factors that are making the market more attractive to international companies is its ongoing tax and regulatory reforms, its low labour costs and surplus of skills, as well as the health of its domestic market and macroeconomic stability.

The survey also showed that India has made significant gains over the last year in terms of attractiveness, thanks to efforts to improve the ease of doing business, as well as recent foreign direct investment policy reforms.

Rajiv Memani, chairman of the global emerging markets committee at EY and regional managing partner for India, said: "The survey findings are a testament to India's growing appeal with the global investment community.

"Over the last year, the improvements in India's macroeconomic indicators, accompanied with the ongoing efforts to revitalise growth, have offered new hope to investors. It is an encouraging start and we need to build upon it further."