Officials Promise The Earth To Attract Us Investments

Indias bureaucratic brass is rolling out the red carpet for foreign investors, promising to iron out any wrinkles and steam out any stains.

We need investment. Unless there are dramatic improvements in our infrastructure, we will have large problems in the future, cabinet secretary T S R Subramanian told foreign institutional investors (FII) and corporate representatives in New York.

The delegations visit is designed to underscore the governments recognition that foreign investment is essential to plug the resource gap.

Investors were offered snapshots of potential projects and investment requirements in specific infrastructure sectors, even as the bureaucrats fielded questions on stumbling blocks and further reforms at sessions hosted by the Indo-American Chamber of Commerce and Robert Flemings.

 

Subramanian and his team of senior bureaucrats, including the surface transport and coal secretaries, are mixing candour with promise as they try to woo fresh investment.

There have been problems. The difference now is that the systems are in place so that new projects can move faster, the cabinet secretary repeatedly told investors, even as he admitted to frustrating delays in the past five years.

Among other things, the top bureaucrat is promising to develop fresh instruments to provide long-term financing for infrastructure projects, increase interaction with the state governments to ensure speedier implementation at all levels, setting up more independent regulatory authorities and guaranteeing decisions within a two-month window from the Environment Appellate Authority.

The top level team is seeking investments in everything from roads and ports to power generation, telecom, oil exploration and mining.

Indian officials estimate that the country will require a staggering $400 billion for infrastructure development alone over the next decade if its growth is to stay on track. Last year, however, the country succeeded in attracting total foreign investment of just $6.3 billion.

Among the projects being highlighted is a proposal to link Indias four major metros with four-lane highways, major and minor port development, competitive bidding for power transmission, private sector funding for an international airport in Ahmedabad and a second domestic terminal in New Delhi, and proposals for liquefied natural gas units.

The investors, most of whom are already familiar with India, were listening. Some were eager to see more signs of change.

This was interesting, but I would wait to see deeds, not words, said an India-watcher who asked not to be identified. Others said the sessions were helpful in raising interest in India. I found it very useful, said Toronto-based Goodman and Co analyst Chuk Wong.

India had slipped into the backburner for foreign investors in recent months, amid concerns of creaking infrastructure and continuing red tape. Earlier this year, international credit rating agency Moodys had warned that directionless economic policies could lead to an unfavourable outlook for the countrys Baa3 investment grade rating.

The Indian delegation, hoping to spark renewed interest in the country, will visit Washington DC, where they will meet US officials, before making presentations on the West Coast.