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Finance Minister P Chidambaram left Ottawa for Boston on Tuesday morning, following his original schedule despite the bomb attacks that killed three and injured over 140 people at the Boston Marathon a day earlier. The South Asia Institute at Harvard University confirmed his engagements at the school, including a speech titled 'Rise of the East: Implications for the Global Economy', would continue as planned.
He is scheduled to meet representatives of nearly a 100 sovereign wealth funds and endowments in the city later in the day. The minister will leave for New York after his meetings in Boston. On Wednesday he will meet over a 100 representatives of sovereign wealth funds, pension funds and university endowments, as well as a group of CEOs in New York; he is expected to meet Wall Street bankers and private equity CEOs over dinner the same day. Chidambaram will leave for Washington, DC on Thursday to attend the Spring meetings of the IMF and World Bank.
On Monday in Toronto, Chidambaram faced a wide range of questions and concerns from Canadian business leaders during his visit to drum up foreign investment into India. He held private meetings with the heads of major Canadian pension plans and with a group of Canadian CEOs.
According to sources, the pension plan chiefs urged India to grant them special treatment, in the manner of the Chilean government. The minister is learnt to have ruled out such an incentive, stating it would violate the right to equality as outlined in Article 14 of the Constitution. He also argued that with India extending the most favoured nation (MFN) status to several countries, it could not give special concessions to Canadian funds.
Instead, he pointed out the principles of Anglo-American jurisprudence shared by India and Canada, maintaining that would be a strong protection for Canadian investors.
The pension plans represented at the meeting were the Canada Pension Plan Investment Board (CPPIB); the Ontario Teachers' Pension Plan (OMERS); PSP Investments and Caisse de Depot. They collectively manage around half a trillion dollars, and have emerged as large-scale investors around the world in recent years.
In a separate meeting, some of the CEOs who met the minister included executives from Bombardier, CIBC, Manulife, Irving Oil, Brookfield Asset Management and Export Development Canada. At the closed-door meeting, Chidambaram reiterated the government's commitment to fiscal consolidation and reforms.
He told them he and Prime Minister Manmohan Singh were committed to raising the foreign direct investment (FDI) cap in the insurance sector from 26 per cent to 49 per cent. He also informed them that the Opposition leaders in both houses of Parliament, Sushma Swaraj and Arun Jaitley, had promised to get back to him on the issue after internal discussions in their party, the Bharatiya Janata Party. The Union Cabinet had approved the FDI cap hike last October, but the Insurance Amendment Bill is yet to be passed by Parliament.
The issue of outsourcing also came up in the meeting. Canada has witnessed a political uproar in recent days following allegations that RBC, a major Canadian bank, had used temporary workers brought from India by outsourcing company iGate, to take the place of Canadian employees. Both RBC and iGate maintained they followed the law relating to the use of temporary foreign workers.
The minister was also asked if Indian companies would invest in Canada's oil and gas sector, and about Indian purchases of oil from Canada's eastern coast. Earlier, in a speech hosted by the Canada India Business Council, Chidambaram had said the government was actively considering two major changes in oil and gas policy with respect to pricing, and profit or revenue sharing.
He said under a proposal being considered by the Cabinet, there would be a move away from the production sharing contract model to a revenue sharing contract model, as in the case of the telecom sector. On pricing, he said, "We are now in a very advanced stage of considering how to move from an administratively fixed price to a market related price for the oil and gas that is explored and excavated by the producer."
He was confident the two changes would increase the attractiveness of the oil and gas market to investors.
Chidambaram told the CEOs he expected to have independent regulators in place for the coal and roads sector within four months.
Later in Ottawa, the minister met with his Canadian counterpart, Jim Flaherty, Canada's foreign minister John Baird and Canada's central bank governor Mark Carney.
