US plans $1 trillion investment in India

[SpArK]

Private Firms to Invest Half of US $1 Trillion in Building India's Infrastructure in 2012-17


Saturday December 24, 2011Finance Minister Pranab Mukherjee today said the private sector is expected to play a major role in financing infrastructure projects in the country over the next five years, accounting for about half of the targeted investment of $1 trillion.

India's current Five-Year Plan ending in March 2012 called for investing US$475 billion in infrastructure construction projects, with breakdown shown here.

Noting that infrastructure financing is one of the key concerns for the country, Mukherjee said while the 11th Five-Year Plan infrastructure finance target is expected to be met, preliminary estimates for the 12th Plan (beginning next year) indicate a substantial 30 per cent gap in financing of the targeted investment.

"Public-Private Partnerships (PPP), wherein the private sector is participating in the construction and operation of public infrastructure assets, is one of the most important developments in infrastructure delivery in our country," Mukherjee said at a bilateral meeting with UK Secretary of State for Business, Innovations & Skills Vince Cable here.

He further said both countries can learn a lot from each other's experiences and expressed his happiness at the launch of the Britain India Infrastructure Group (BIIG).

"BIIG is a major step forward to facilitate the development of infrastructure in India with the involvement of senior officials from both sides and the major private sector players in infrastructure development," he said.

He said BIIG has been formed at an opportune time, with India gearing up to almost double the investment seen in the Eleventh Plan (2007-12) during the Twelfth Plan (2012-2017).

The Finance Minister further said he would like the National Skill Development Corporation (NSDC) to have tie-ups with overseas companies to bridge the skill gap in the country, particularly with respect to the infrastructure sector.

"Besides creating skilled manpower, we also want to develop and set up a vibrant bond market in the country to facilitate infrastructure financing," he added.

He said as per the existing guidelines, Indian companies can issue bonds in the domestic currency, which can be traded in the corporate bond market in India.

He said said that foreign institutional investors can collectively invest up to $20 billion in these bonds, with a "carve out" of $5 billion for infrastructure projects.

The Finance Minister said the creation of a regulatory framework for credit enhancement is also under active consideration.

Vince Cable said various UK companies are interested in investing in this sector in India and hoped BIIG will facilitate investment by UK companies in the development of infrastructure in India.

Source: Business Standard

 

[LETHALFORCE]

2] Why should US companies should invest in Indian Defense R&D Sector ? I do not see any viable reason for that.

With India being the world's largest weapons importer it would mean US defense sector would have a permanent presence.

 

[nrj]

With India being the world's largest weapons importer it would mean US defense sector would have a permanent presence.

That wont be good thing for indigenous industry. Foreign Defense companies should have presence in India, strictly on commercial interests.

 

[LETHALFORCE]

That wont be good thing for indigenous industry. Foreign Defense companies should have presence in India, strictly on commercial interests.

It would be a good thing. It will force indigenous companies to be competitive to survive. Indian govt will have say in who and what sectors of defense they will allow?

 

[Iamanidiot]

something is truly wrong with this.I think they are misquoting this stuff

 

[nrj]

It would be a good thing. It will force indigenous companies to be competitive to survive.

Desi Pvt sector will collaborate with foreigners, DPSUs wont be able to spill that much of money. For example, these pvt sector JVs will invest in R&D and present TDs to Armed Forces before they even specify requirements. This happened post WW2 in US.

MoD will keep clearing such orders due to pressure from forces or under-table deals. MoD now can clear orders even without FM's approval. Funds at MoD's disposal are only going to grow bigger.

 

[LETHALFORCE]

Needed: $1,000,000,000,000 for India's infrastructure! - Rediff.com Business

Needed: $1,000,000,000,000 for India's infrastructure!

 

[LETHALFORCE]

US commerce chief to lead infrastructure trade mission to India | Firstpost

US commerce chief to lead infrastructure trade mission to India


New York: US Commerce Secretary John Bryson, a key member of President Obama's economic team, will lead a delegation of 20 to 25 infrastructure companies on a business development mission to India, officials said on Monday.

The trade mission will make stops in Delhi, Jaipur and Mumbai between March 25 and 30, 2012 and focus on infrastructure opportunities in India. The US business leaders will meet Indian government officials, prescreened potential partners, distributors and licensees.
Exports are leading the US economic recovery and contributing to future economic growth and job creation in America, said Commerce Secretary John Bryson.
In its draft Twelfth Five-Year plan for 2012-2017, the Indian government proposes to invest $1 trillion to upgrade infrastructure, almost double of what it had earmarked in the earlier plan, which ends in March 2012. It is banking on private sector participation, including foreign investment, to fund half the massive expansion through the Public-Private Partnership (PPP) model.

Unfortunately, there is little sign of any foreign investment pick-up in the infrastructure sector this year. United Nations data shows India received less than $20 billion FDI in the first six months of 2011, compared with more than $60 billion in China, while Brazil and Russia took in $23 billion and $33 billion, respectively. If India wants foreign investment to build its airports and toll roads it has to help the investment climate, speed up approvals of projects hit by red tape and environmental approvals.

Still, sales of big gnarly construction machines like excavators and cement mixers are up 20 percent since 2002 for US manufacturers thanks to the frenetic building activity coming out of China and India. Caterpillar Inc, the world's largest maker of construction equipment is optimistic about where business is going in India over the next five years. India represents a huge market for companies like GE Construction and Caterpillar.

"Exports are leading the US economic recovery and contributing to future economic growth and job creation in America," Bryson, who has been the CEO of California-headquartered utility company Edison International for 18 years, told Firstpost.

"Selling more made-in-USA infrastructure products to India will help US companies grow and hire more people while helping India meet its ambitious goals to dramatically improve it roads, railway and bridges," added Bryson.

Trade officials told Firstpost that the US delegation was focused on finding opportunities in India's infrastructure sector which covered power, airports, toll roads, railways, ports and intelligent transport systems. The mission also includes firms providing project management and engineering services.

India needs to reform policies concerning project execution and long-term funding to fix its infrastructure, which is the biggest roadblock to its target of achieving a 9-9.5 percent annual growth during 2012-2017, Standard & Poor's Ratings Services said in a recent report.

India's road, railway and port expansions are falling far short of targets. In the year through March 2011, the National Highways Authority of India built 1,780 kilometers of motorways, about 30 percent less than its target. In the same period, the nation added 9,585 megawatts of power, 34 percent less than forecast.

Long delays in government and regulatory decision-making have caused infrastructure projects to fall way behind schedule. Reuters quoted an official, monitoring government infrastructure projects, saying that of 558 government projects, 241 were delayed as of end-July, resulting in a cost overrun of some 20 percent, or more than $31 billion. Most of the projects were held up by two years or more on average due to land acquisition and environmental clearance hassles.

 

[Param]

The trade mission will make stops in Delhi, Jaipur and Mumbai between March 25 and 30, 2012 and focus on infrastructure opportunities in India

Why only Delhi, Jaipur and Mumbai? Is that all of India? Or are they only interested in DMIC?

 

[Vyom]

The government is debt ridden but many US corporations are loaded with cash as I said earlier. Cisco,intel,microsoft,Apple,JP morgan etc.. These corporations together have more than 1 trillion in cash. (jp morgan alone has 900 bilion in cash)

So they deploy funds from companies of profit and then bring them contracts? So it is more like thrusting their business houses to service infrastructure here in return to hefty amounts? Obviously, there cannot be any free meals.

 

[LETHALFORCE]

So they deploy funds from companies of profit and then bring them contracts? So it is more like thrusting their business houses to service infrastructure here in return to hefty amounts? Obviously, there cannot be any free meals.

yes and India will have to pay at some point what is borrowed?(with interest).

 

[amitkriit]

yes and India will have to pay at some point what is borrowed?(with interest).

We need Infrastructure to develop our industries and our economy and we don't have the money. Nobody will invest in a business which doesn't seem to be profitable, but inviting such investment will be profitable for us in long run, since it will catalyze the economic activities.

 

[LETHALFORCE]

We need Infrastructure to develop our industries and our economy and we don't have the money. Nobody will invest in a business which doesn't seem to be profitable, but inviting such investment will be profitable for us in long run, since it will catalyze the economic activities.

of course, but the trick will be to diversify the investments where one country does not have such a huge share to bully you.(USA,Canada,Malaysia,Japan,S. Korea, EU,UAE ETC...)