Thursday, Jun 07, 2012
--India to start road shows in Gulf nations from June 10 to woo investors
--India may also conduct road shows in Europe, U.S.
--Gloomy global economic conditions seen as an opportunity for India to attract investment
(Recasts the first paragraph, adds comments from finance ministry officials in 3rd, 5th and 6th paragraphs, context in 4th and 5th paragraphs)
By Mukesh Jagota and Rajesh Roy
NEW DELHI--The Indian government is seeking to attract investment from foreign individual investors, as it attempts to dispel concerns that a policy paralysis and unwelcome tax proposals have shaken the confidence of overseas funds in Asia's third-largest economy.
As part of the initiative, top government officials will embark on a marketing drive to promote India as an investment destination. The first stop will be the Middle East--Saudi Arabia, Dubai, Oman, Kuwait and Bahrain--where wealthy individuals are looking for investment opportunities in emerging markets, Indian finance ministry officials said Thursday.
"India is an incredible destination for investment. Lots of people are ill-informed, which masks their ability to see what is happening here," Economic Affairs Secretary R. Gopalan, who will lead the delegation to Gulf nations for a five-day road show starting June 10, told reporters.
The road shows follow New Delhi's decision in January to allow foreign individuals to directly invest in Indian equity markets, and officials say the meetings would seek to clarify investors' doubts over the rule change.
The initiative comes at a time when slowing growth, global uncertainty and the government's failure to push through reform measures is prompting foreign funds to pull out of the South Asian nation's capital markets.
Thomas Mathew, joint secretary in charge of capital markets at the finance ministry, said market participants estimate that overseas individuals could invest between $80 billion and $90 billion in India over the next two years.
"Even the pessimistic estimates peg potential investments at $20 billion to $25 billion," he said.
After the Middle East, the government proposes to hold similar marketing drives in the Far East and later in Europe and the U.S.
Mr. Gopalan also said that a cut in interest rates would help revive the growth momentum in the Indian economy. "There is a possibility of growth picking up if interest rates are reasonable."
The comments come ahead of the Reserve Bank of India's rate-setting meeting on June 18. The central bank is under increasing pressure to ease monetary policy after data showed the economy grew 5.3% in the January-March period, at its slowest pace in nine years.
Despite the economic slowdown, some investors are still betting on India.
"With uncertainty in Europe, a gross domestic product better than most, we feel investors will park funds in safe and attractive propositions like India," said an executive at a top global brokerage, asking not to be named.
Write to Mukesh Jagota at mukesh.jagota@dowjones.com and Rajesh Roy at rajesh.roy@dowjones.com
(END) Dow Jones Newswires
07-06-12 1336GMT
