Deficient infrastructure is the single largest constraint in growing Japanese companies' investments in India but they are willing to participate in addressing the challenge, according to Mr Hidenobu Teramura, Director, Financial Co-operation Division, Ministry of Economy, Trade and Industry, Japan.
Infrastructure development can be enabled with private sector participation in India which spends just about one-eighth of the investments that China makes in infrastructure. Japan has faced similar challenges decades back and has built up experience in a range of sectors that it is willing to share.
At the South India Infrastructure Investment Summit 2011, organised by the Confederation of Indian Industry in partnership with the Japanese Ministry, representatives from Malaysia and Japan evinced keen interest in building India's infrastructure. But policies and guidelines are needed to mobilise funds for investments into this sector here, they said.
According to Dato Seri S. Samy Vellu, Malaysian Special Envoy to India and South Asia on infrastructure, Malaysian investors could partner with Indian counterparts to fund infrastructure development in India through an infrastructure investment-based fund that could be listed on the Malaysian stock exchange.
India should support the private sector with incentives in the form of tax breaks, matching investments ‘dollar-for-dollar', identify a pipeline of projects by announcing a master plan for infrastructure investments and bring together insurance, finance and risk sharing to bring down cost of funds.
Mr S.K Goel, the conference Chairman, and Chairman and Managing Director, India Infrastructure Finance Co Ltd, said half the estimated investment of $1 trillion for the infrastructure sector in the coming five years has to come from the private sector. Innovative funding mechanisms should be devised to bridge financial constraints.
A CII report on ‘South India Infrastructure Opportunities' was released at the summit.