India can draw big investment, says OECD

The Organisation for Economic Cooperation and Development (OECD) today said India could attract as much foreign direct investment (FDI) as China if it continued with economic reforms.

"Infrastructure is always a factor. China has paid a lot of attention on infrastructure and things get done quickly there. However, if India continues along the path (of economic reforms) we see a convergence in investment levels," Richard E Hecklinger, Deputy Secretary-General of the OECD, told Business Standard here.

Hecklinger said the OECD had undertaken an assessment of the investment policy of countries like China. "There is always the question of the methodology used in measuring FDI. Are we using the same method? Moreover, China not only started opening its economy early but income levels are also high there. Once income levels cross a critical mass demand is created, which in turn can be met through increased investment," he said.

Hecklinger was speaking on the sidelines of a seminar on investment organised by the Confederation of Indian Industry and the Department of Industrial Policy and Promotion,

On the impact of Left pressure on the government's policies, he said: "There is always conflicting interests in a democracy. However, investors will assess their risks. They are more comfortable where there is continuity and predictability. If they are confident that political and economic policy framework will remain unchanged they will invest."

Hecklinger said telecommunications, electronics and high-technology areas such as medicine and healthcare would attract more investments in India.

"There is a huge scope for India in medicine as globally populations are aging and more people will need high quality healthcare," he said.

On the impact of high crude prices on economies like India, he said while it would be painful in the short term and lead to adjustment problems, it could provide opportunities for developing alternative fuel technologies, thereby helping companies around the world in reducing their costs and operating more efficiently.

Hecklinger said further cooperation between the OECD and India was up to the Indian government.

"We are keen to have a policy dialogue with India in several sectors, including health and social welfare and science and technology," he said, adding the OECD had even started helping some countries on issues like tackling spam (unsolicited mails).