India, US joint forum on investment here in the works

The Indian and American governments are jointly developing a forum that will lay down a road map for easier inflow of both foreign direct investment (FDI) and foreign institutional investment (FII) into this country.

The forum will aim at enhancing flows from institutional investors and corporate entities, primarily by facilitating individual proposals and projects.

“The US is the leading source of FDI and FII in the world. The Indo-US Investment Initiative will be led by our ministry of finance (MoF) and the US department of treasury,” said a top official who is involved in the project.

MoF will set up a single-point problem resolution and facilitation arrangement, to ensure prospective investments do not face unnecessary hurdles and do actually materialise, the official said. It will have a particular focus on capital market development and financing of infrastructure.

It appears an infrastructure collaboration platform is also being set up between MoF and the US department of commerce to enhance participation of US companies in projects here.  This was envisaged during Prime Minister Narendra Modi’s meeting with US President Barack Obama in Washington last month.

Finance Minister  Arun Jaitley was to meet  chief executives  of leading US companies  during a  visit  to the US  for the World Bank and International Monetary Fund meetings, to start  from  Friday.  In that meeting, the CEOs were expected to raise the issue of the joint initiative. However, due to health problems, the minister will  skip the meeting. Finance Secretary Arvind Mayaram has gone instead but the meeting with CEOs has been cancelled.

US FDI inflows into India have declined in recent years. It came down from $1.94 billion in 2009-10 to $1.17 billion the next year and to $1.11 billion in 2011-12. In the next two  years,  the inflows were each less than $1 billion.

India needs over  $1 trillion in five years from 2014-15 for  infrastructure development, according to a study by the Confederation of Indian  Industry. As much as 40 per cent of it is hoped for from the private sector.