India needs $4.5 trillion infra spending over next decade: FM Piyush Goyal

Goyal refuted any charges that Indian banks are shying away from infrastructure projects, but said they have provided yeoman services to the country's infrastructure growth will continue to do so

India would need $4.5 trillion for investment in infrastructure over the next decade, the cost of which could be a challenge, but raising the resources is not an issue, Finance Minister Piyush Goyal said on Monday. He was speaking at the third annual meeting of the Asian Infrastructure Investment Bank (AIIB).

According to the Finance Minister, the cost of financing in a rising interest rate environment is an “important challenge”, but multilateral agencies and other funds are eager to invest in India. “Getting finance is not a challenge for India,” Goyal said.

According to Goyal, events like the annual meet of AIIB taking place in the country is a sign of a resurgent India, “a new found confidence in our ability to host such events.”

“World’s biggest and best companies want to invest in India,” the finance minister said, adding in Jannuary this year, he met AIIB president Jin Liqun, “who expressed lot of interest in taking up the next level of high speed corridor projects that India would envisage going forward.”

“We had a very engaging discussion, particularly on the golden quadrilateral and its laterals, which is the real area where we have a lot of demand for high speed connectivity and AIIB would possibly be in the horizon for such projects in the future,” Goyal said.

“Our financing needs are so enormous, that we maximise our borrowings from all the multilaterals, including the AIIB,” Economic Affairs Secretary Subhash Garg said.

Not only multilaterals, but also bilaterals. So, the HSR funding from Japan used to be about $3 billion a year, is now expected to go up to about $5 billion a year. So, we need our funds from everyone,” Garg said.

Goyal refuted any charges that Indian banks are shying away from infrastructure projects, but said Indian banks have provided yeoman services to the country’s infrastructure growth and they will continue to do so even as India chases funding from other sources as well for the infrastructure needs.

India is the largest recipient of AIIB funds.  Including a deal $200 million deal signed for a fund of National Investment and Infrastructure Fund (NIIF), the country has borrowed $1.4 billion from AIIB for seven projects. Another 9 projects worth $2.4 billion is in the pipeline. Out of these new projects, four are non-sovereign funding, Goyal said.