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Shri Kamal Nath, Union Minister of Commerce & Industry, today called for foreign direct investment (FDI) in the infrastructure sector, which constitutes the backbone of any growing economy. In particular, he invited investors to look at infrastructure areas like power, highways and roads, seaports, urban infrastructure and telecom, the latter being a leading area for partnerships with the US. Addressing the “Indo-US Summit: Partnership in Building India’s Infrastructure”, organised by the Indo-American Chamber of Commerce here today, Shri Kamal Nath recalled the Prime Minister’s assessment that India would require an investment of at least 150 billion dollars over the next five to ten years to upgrade her infrastructure. “Energy, water supply, solid waste disposal, roads, airports and seaports are crying out for attention. Indian industry is growing at a blistering pace. But when we benchmark against fast growing economies in the world, the biggest factor holding our productive energies back is the poor quality of the infrastructure we have”, he said, while emphasising that the government had now reoriented its role by focusing on an enabling regulatory and policy framework so as to encourage public-private partnerships, including FDI.
The Indo-American Chamber of Commerce has drafted a seven-point agenda to give a critical push to the infrastructure sectors such as ports, roads, airports and urban development in the country. The agenda is being discussed at the Indo-US Infrastructure Summit here on February 9 and 10.
Shri Kamal Nath said that besides the many distinct advantages that India offered, the investor would finally look at the return of investment while making his choice. He pointed out that “returns on investment in India is very good comparable with those prevailing in any other country. A recent survey of 500 foreign companies doing business in India has shown that as many as 77% of the foreign investors were making profits and another 9% were breaking even. (And the balance 14% are about to make profits!). According to study by the US Department of Commerce, profitability of US investments in India compares well with such investments elsewhere”.
Recognising the growing role of trade and the need for creating trade-related infrastructure, Shri Kamal Nath said that the government had decided to promote setting up of Free Trade Warehousing Zones where FDI up to 100% would be allowed and which would get all the benefits available to the Special Economic Zones (SEZs). “Special Economic Zones would be at the centre of the strategy for export growth. We have crafted a very attractive set of incentives for developers setting up the Special Economic Zones, and also for the units to be located within such Zones. We hope to soon put in place a specific legislation on Special Economic Zones, which will consolidate and streamline all issues related to the SEZs”, he said.
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