Modi to meet global funds on November 5, invite investments into India

KR Srivats New Delhi | Updated on October 26, 2020

Prime Minister Narendra Modi will meet representatives of top global investment funds and sovereign wealth funds (SWFs) on November 5 as part of efforts to attract more investments into the country, especially in infrastructure.

Sovereign wealth funds, pension funds and global investment funds from Canada, Singapore and the US are among those who are likely to participate in the meeting, informed sources said.

This meeting — to be held as virtual conference — comes at a time when there is recognition within government circles that foreign investor interest in India needs to be sustained and investment opportunities need to be better showcased as the Indian economy normalises post-Covid-19.

Both on the manufacturing and services side, things are turning for the better in recent months. In September 2020, India’s manufacturing purchasing managers index (PMI) recorded its fastest pace of growth in over eight years.

It maybe recalled that both private equity funds and foreign direct investments are seeing robust flows this year despite the pandemic.

Record private equity flows

Private equity investments in India hit a record $28.66 billion till September 2020 this calendar year, as against $16.27 billion invested in the whole of 2019. In 2018, PE investments stood at $10.8 billion. FDI inflow increased 13 per cent to $35.73 billion in April-August 2020. Of this, FDI equity inflow during April-August 2020 stood at $27.10 billion, up 16 per cent over the equity inflows in comparable period of last fiscal.

At the upcoming meet, foreign investment funds may raise issues around the government stance on allowing direct listing of shares abroad and stipulation of dual listing of equity shares; and aspects of beneficial ownership threshold for investment approval where investments are flowing through countries with which India shares land border, industry sources said. In the recent months, there have been investment proposals from US companies with minority shareholders from China put on a approval route on account of the changes in FDI regime in April this year, the sources said.

Welcome to GIFT City

The recent government initiatives on attracting investments into the Gujarat-based GIFT City— the country’s only international financial services centre — may also come up for discussion at the meet. The government has established the International Financial Services Centre Authority as the sole regulator for economic activities in GIFT City.

Several regulatory initiatives to attract global banks, insurance firms, asset management companies and financial services firms to set up shop in the GIFT City are already underway.

Published on October 26, 2020

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