InvestIndia scouts for more tie-ups to boost foreign fund inflows

Govt raised FDI cap in telecom, asset reconstruction companies, credit information companies recently

With the government trying hard to attract foreign capital inflows, investment promotion agency InvestIndia is scouting for tie-ups with more countries to boost the foreign direct investment (FDI) inflow into the country.

Set up in 2010, InvestIndia is a joint venture between Federation of Indian Chambers of Commerce and Industry (FICCI), the department of industrial policy and promotion (DIPP)and various state governments. The venture’s mandate is to attract investments to India as well as scouting opportunities for Indian investors abroad.

“For hardselling India abroad, we have already signed memoranda of understanding with nine countries and are in the process of increasing working relationships with almost all the countries in the world to increase the FDI inflow,” said Anupam Srivastava, managing director, InvestIndia.

“For this, policy-level initiatives like raising the FDI cap in various sectors are also needed,” he said. The government had raised the FDI cap in telecom, asset reconstruction companies, credit information companies recently.

“In the last three years, we have extended our services to 1,200 queries and about 40 per cent of these have taken off as investments at the ground level and others are in the process,” added Srivastava.

Each of these queries in the last three years were looking at a minimum investment of $5-10 million.

The agencies that InvestIndia has signed up MoUs include Invitalia, Japan External Trade Organization, Korea Trade-Investment Promotion Agency, UK Trade & Investment, Ubifrance, Invest in France, Board of Investment of Mauritius, Select USA and Czech Invest, while it has close working relationships with another 30 countries.

While FICCI holds 51 per cent equity in the venture, DIPP has 35 per cent and various state governments hold 0.5 per cent each. According to Srivastava, FICCI’s presence is bringing the private sector efficiency to the venture.

“We are also providing after care services to countries that are having huge investments in the country. This will include services like facilitation in land acquisition and clearing regulatory hurdles. And also in finalising investment destinations,” said Srivastava.

He said InvestIndia is also holding strategic investor meetings and campaigns in various countries to hardsell India brand. The company is providing after-care services to South Korea, Japan. Thailand, Australia and Singapore, and is in the process of adding China to the list.

Out of the 1,200-odd queries that InvestIndia got in the last three years, more than 680 are from Asia and about 300 are from Europe in various sectors such as infrastructure, manufacturing and services.

According to government instructions, the venture is kept in the loop about the policy changes in 40 sectors across the country. Among the states that are most active and investor favourites in terms of attracting investment are Karnataka, Andhra Pradesh, Gujarat, Maharashtra, Odisha, Madhya Pradesh, Haryana, Rajasthan and Punjab, according to InvestIndia.

FDI inflows into India dropped 38 per cent to $22.42 billion in 2012-13, compared to $35.12 billion in the previous financial year. The country needs all kinds of foreign money inflows in these uncertain times to shore up the rupee value and finance current account deficit. CAD had touched the record 4.8 per cent of GDP in 2012-13 against 4.2 per cent in 2011-12. It is pegged at 3.7 per cent for the current financial year.