India’s Prime Minister Narendra Modi announced late Wednesday night that India would privatise 100 state assets, ranging from projects in oil and gas to ports and airports and those in the power sector.
The investment opportunities are said to total 2.5 trillion Indian rupees ($3.4 trillion), UAE state media WAM reported. India has subsequently launched the National Asset Monetisation Pipeline to manage the shift.
“The mantra that the government is moving forward with is ‘monetise and modernise,’” the prime minister said during a webinar. “For those who are associated with us from abroad, there is an open sky of new opportunities in India,” he said.
Modi said that money raised through the sale of state assets will be spent on welfare programmes such as building houses for the poor, laying roads in villages, opening schools, and bringing clean drinking water to those who have no access to such facilities.
Meanwhile, India is considering easing foreign investment rules for the construction sector.
A proposal to allow limited liability partnerships to invest in the construction of townships, roads, hotels and hospitals is under discussion, Bloomberg reported.
Modi is looking to breathe life into the country’s economy that had its worst annual contraction on record. The country is still losing jobs after the coronavirus-induced lockdown.
India will seek $777 billion worth of investment across infrastructure for development by 2022.
The construction sector received FDI inflows worth $25.7 billion between April 2000 and September 2020, according to government data.
Modi is looking to breathe life into the country’s economy that had its worst annual contraction on record.
Bloomberg reported that “the relaxation in rules is also likely to help the Modi government get closer to its target of creating affordable housing for all in urban areas by 2022 and building 100 smart cities.”
In April, India tightened its FDI rules to prevent “opportunistic takeovers and acquisitions of Indian companies due to the current COVID-19 pandemic,” the Ministry of Commerce and Industry said. But the Gulf was not affected from changes to the company’s policy. Only countries that share a land border with India were affected.
Currently, foreign investors have to meet certain conditions to invest in India, including a three-year lock-in period before exiting the construction sector.
With the new privatisation plans, relaxing investment rules will be a play to attract investors.
Over the past decade and a half, Gulf investment to India has increased dramatically, with the UAE being the biggest source of Gulf FDI to India, comprising nearly 80 percent of total trade from the Gulf.
Even as the pandemic slashed trade globally, Gulf investors continued to look to India.
Follow us on
