India’s Finance Ministry Goes Shopping For Foreign Investors
Mar. 22 – India looks set to engage in a more aggressive push to attract foreign direct investment (FDI) into the country as the Finance Minister, P. Chidambaram, prepares a comprehensive target list to attract investment inflows into India. On that list are believed to be specific funds, such as sovereign wealth, pension plans and universities, whose managers would be contacted to discuss investing in India.
Geographically, and perhaps tellingly in light of the current global climate, West Asia is a particular focus, with the Ministry targeting investors in the Gulf region. Chidambaram will be taking a tour to the United Arab Emirates and Qatar next week on a mission to drum up investment.
The Ministry is also preparing a list of Fortune 500 companies that have invested in India, with plans to hold discussions with them over what needs to be done to assist them in investing further into the country. Amongst these are businesses such as Coca-Cola, PepsiCo, Philips, GM, Ford, Sun, Honeywell, Pfizer, Citigroup, Prudential, Bombardier, GM, WalMart, Hewlett-Packard, IBM, AT&T, Apple and Fedex, among many others.
A similar list, but of Fortune 500 companies not yet significantly invested in India, is also being prepared, with India’s overseas Ambassadors and Commercial Attaches expected to reach out to these companies. This list includes global players such as Exxon Mobil, Chevron, Conoco-Phillips, Berkshire Hathaway, Fannie Mae, Caremark, Cardinal Health, Wells Fargo, Walgreen and many others.
Mr. Chidambaram will also be visiting Japan, Canada and the United States over the next few weeks to participate in road shows promoting India as an investment destination.
Internally, the Ministry has requested an item by item breakdown of the various sectoral policies concerning foreign investment into India, and is to look at removing, simplifying or amending conditions for every category. The body will also review announcements concerning FDI related matters made over the past three Union budgets that are still pending. A list outlining the required follow up measures, and the Ministries needed to enact them, will be presented to the Finance Minister for review.
“It seems Mr. Chidambaram is on the warpath,” says Chris Devonshire-Ellis, Founding Partner and Principal of Dezan Shira & Associates. “Not only physically getting involved in selling India Inc, but also carrying out a complete ministerial review of governmental and political bottlenecks that internally appear to have stymied much of the intended reform. His measures can only be positive news for the future of FDI into India. If he is able to take action against some of the administrative and outmoded policy issues that have impeded reform in this area, then we may finally start to see a more energetic path taken by the country in terms of being more user friendly towards investors.”
Chris Devonshire-Ellis is the Founding Partner and Principal of Dezan Shira & Associates. The practice assists foreign investors in India and maintains offices in both Delhi and Mumbai. Chris will be making a presentation about FDI, legal and tax issues in India at the annual “Hot Markets Watch” Conference on April 4th, 2013, at the Cintas Center at Xavier University in Cincinnati. This is one of America’s premium overseas investment events and has a specific India focus this year. Details: www.HotMarketWatch.com
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