Prime Minister Narendra Modi invited global funds and companies to invest in India, pledging to do whatever it takes to make doing business easy as the economy heads for an unprecedented contraction.
Demand with democracy, and stability with sustainability are things that India offers, Modi has said in a virtual address to global investors including British Columbia Investment Management Corp, GIC Pte, and Korea Investment Corp. It is also a place that provides growth with a green approach, he said.
“A strong and vibrant India can contribute to stabilisation of the world economic order,” Modi said, pledging to “do whatever it takes to make India the engine of global growth resurgence. There is an exciting period of progress ahead. I invite you to be a part of it.”
Modi’s meeting with the world’s largest pension and sovereign wealth funds, which have about $6tn of assets under management, follows his government’s measures in the recent past to make India more investor-friendly. That includes offering incentives to some manufacturers, amending labour laws and lowering tax on companies to among the lowest in Asia.
Still, India has had marginal success in attracting investments with businesses preferring Vietnam and other South East Asian nations in their quest to reduce reliance on China, and matters have been made worse by rising coronavirus infections. With more than 8mn reported infections, the South Asian nation is the second-worst-hit by the pandemic after the US.
That’s not all. Investors, including Vodafone Group Plc and startup Devas Multimedia, have had to contend with cumbersome rules and lengthy court battles that have threatened to push some into bankruptcy. An estimated 500,000 tax cases against companies are pending in Indian courts and it could take years before the government sees any of the money, assuming it wins, the Economic Times reported earlier this year.
Billionaires Mukesh Ambani and Uday Kotak were among those said to have attended the conference held virtually because of the pandemic. Investors will get to interact with Modi directly over the next two weeks where the government would pitch investment opportunities and hear their concerns.
“India’s growth has the potential to catalyse global economic resurgence,” Modi reiterated. “Any achievements by India will have multiplier impact on world’s development and welfare,” he added.
While foreign fund inflows into Indian stocks have been positive this year, and foreign direct investment saw a 13% increase in the last five months, the outlook for the economy isn’t very bright. The International Monetary Fund sees India’s gross domestic product declining 10.3% in the year to March, the biggest contraction of major emerging markets.
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