India seeks more Hong Kong and China investment amid building push
The country wants the mainland to spare cash reserved for overseas ventures on infrastructure projects in line with its US$1tr five-year plan
Over the next five years, the Indian government has planned US$1 trillion of infrastructure investments and is seeking Chinese and Hong Kong investments to take a share of this, said Sanjeet Singh, a director of India's Ministry of Commerce and Industry.
The planned investments will cover the Indian government's five-year plan from 2013 to 2018, with 47 per cent to come from private investments while the rest will be financed by Indian state money, said Singh yesterday at a seminar on building trade and investment linkages with India.
In addition, the Indian government has planned US$1 trillion of infrastructure investments for every subsequent five-year plan period for the foreseeable future, Singh said.
"The Chinese are extremely keen to participate in roads, power and telecom [in India]," said Singh, based on feedback he received during his visit to Beijing earlier this month, where he met executives of large Chinese firms.
Of the initial infrastructure plan, 31 per cent has been earmarked for power, 25 per cent for telecommunications, 10 per cent for toll roads while 15 per cent will go to railways, Singh said.
"The government of China has announced China will invest over US$500 billion in the next five years in overseas destinations. We hope they will look at India as one such destination where infrastructure is a prime sector," Singh said.
"India is in need of infrastructure financing. Hong Kong is the ideal place to look to," said M Arunachalam, chairman of the Indian Chamber of Commerce of Hong Kong.
Hong Kong has the most Indian banks outside India and is home to more than 1,500 Indian companies, Singh said.
Since April 2000, Hong Kong's total foreign direct investment in India was US$1.21 billion, a small fraction of the US$214 billion of such investment, Singh said.
Western Europe is the big- gest investor in India with 40.5 per cent of the total foreign direct investment in India from 2007 to 2012, followed by the US with 30.2 per cent, while China accounted for only 4.1 per cent, Singh said.
Asit Tripathy, joint secretary of India's commerce and industry ministry, said: "We have huge infrastructure bottlenecks. We expect the new Indian government will keep infrastructure as a top priority."
India is currently having elections, and any new Indian government is expected to take over in June.
"There are hurdles which hold back Hong Kong interest in investment in India," said Arunachalam, citing the lack of a double-taxation agree- ment between India and Hong Kong, which is under negotiation.
"The multiple departments and plethora of regulations have confused investors and put them off, particularly in the critical area of infrastructure."