The government has decided to pull out all the stops to attract more foreign direct investment from countries like France and Sweden, which have not fallen in line with the US' imposition of sanctions on India.
The government is also wooing investors from Japan, although it had imposed strict curbs on India following the nuclear tests by the latter in May. At the behest of the Prime Minister's Office, investments from various countries are being assessed sector-wise.
Taking its cue from the PMO, the Foreign Investment Promotion Board has been clearing proposals from European countries with alacrity.
More From This Section
On Saturday, the FIPB approved two proposals by French companies. It cleared Gas de France's proposal, at a total estimated project cost _ including borrowings _ of $600 million. Gas De France is to be a strategic partner in Petronet LNG.
The board also approved Vetrotex International SA's proposal to invest about Rs 50 crore in a 100 per cent subsidiary.
It also cleared a proposal by Sweden-based AB Electrolux to take an 80 per cent stake in a Voltas division despite reported protests from some consumer groups.
With industry minister Sikander Bakht having taken the initiative to solve the Maruti imbroglio by patching up with Suzuki Motor Corporation, the government is focusing on Japan. Between 1952 and 1992, Japan's investments in India amounted to $322 million, less than 1 per cent of its global investments, according to government sources.
"Japanese investments in India are about one-sixth that of US investors with actual inflow aggregating about 4.5 per cent vis-a-vis India's total FDI," government sources said, quoting a study paper on Japan being prepared for the PMO.
However, FDI inflows from Japanese companies climbed to about $500 million in 1995. "These figures show that Japanese investors need to be wooed more effectively," sources said, adding, "The patch-up with Suzuki is a step in this direction."
Since the key motive of Japanese investors is to sell products to the local markets, build an international network and look at reducing labour costs, the Indian government feels India can be projected as an ideal destination for Japanese investors.
Sources said a sector-wise analysis of Japanese investments in India showed that 25 per cent of of the total investments have been in telecom, about 14 per cent in chemicals (other than fertiliser), 14 per cent in transportation and about 6 per cent in projects involving electrical equipment.