Foreigners are welcome to bid for state-owned enterprises but public opposition means they may be better off investing in new projects rather than buying strategic assets, the minister in charge of the country's privatisation drive has advised.
Disinvestment Minister Arun Shourie said: 'We are unlocking a treasure chest of companies and foreign investors are welcome to bid but I'm not unmindful of the kind of public reaction there might be.'
Mr Shourie, in Hong Kong for the CLSA Investors Forum, said the best route for foreign capital was through fresh projects.
'Otherwise you will get all this debate about foreigners buying our crown jewels. My advice is to look for fresh projects, not for acquisitions,' he said.
Recently, Singapore Airlines faced fierce domestic opposition when it bid for a stake in the national carrier Air India, even though it had partnered with one of India's largest corporates, the Tata Group. Air India's privatisation has since been put off.
Mr Shourie, a former World Bank economist and newspaper editor, is confident that public opinion in India has come to accept the idea that the Government needs to divest itself of the businesses it has set up over the past 50 years.