Govt roadshows overseas to sell India to QFIs

Written by fe Bureau | New Delhi | Updated: Jun 8 2012, 07:38am hrs
Keen to increase capital inflows in an uncertain global scenario, the government on Thursday unveiled a plan to organise roadshows in five Gulf nations next week and in Europe and the US a few weeks later, targeting qualified foreign investors (QFIs) who were recently allowed to invest in the Indian stocks directly.

The roadshows will be aimed at attracting investors to Indian debt and equity markets, which offer better returns compared with European markets, an official said.

We want to tell foreign investors that there is tremendous opportunity in India. We will address their apprehensions, if any, about investments here, department of economic affairs secretary R Gopalan said.

With the possibility of another round of quantitative easing by the US and long-term refinancing operations by Europe, it may also be a good time to encourage FII flows, Gopalan said. Investment banks are optimistic about the QFI scheme a major reform in Indian capital markets which allows almost every foreign investor meeting KYC norms to invest. Officials from the external affairs ministry, Sebi, RBI, BSE and NSE will join the campaign India as an Incredible Investment Destination.

The roadshows in Saudi Arabia, Dubai, Kuwait, Bahrain and Oman will be organised by the finance ministry during June 10-14, followed by shows in Europe and US later.

A lot of good money is available in the form of sovereign funds (in the Middle East), Gopalan said.

Investment banks have told the government India could expect up to $80-90 billion from QFIs in the next two years. At least $ 20-25 billion should come on a conservative basis, they have said.

Easing of QFI norms has already received a positive response from overseas investors. The finance ministry wants to use this positivity to the country's advantage, building a stronger case that India remained attractive for investors.

Softening inflation, falling global crude oil and the government's infrastructure push would add to the economy's positives, Gopalan said, notwithstanding slowing economic growth and other macro issues. Gopalan said easing oil would help the current account deficit which stood at 4.1% of GDP in 2011-12 even as the fiscal deficit must be contained within the targeted 5.1% in 2012-13.

During the shows, the finance ministry would highlight the changes that had been brought in the QFI regime, the liebralisation of the external commercial borrowings (ECB) norms and measures taken to deepen India's bond market. QFIs comprise foreign individuals, foreign pension funds and foreign trusts, and can invest directly in stocks and equity mutual funds. Separately, BNP Paribas Securities Services is hosting India capital market roadshows in Paris, London and Milan to market Indian securities to potential QFI investors.