The Finance Minister Nirmala Sitharaman believes India is “the place to be in” for long-term capital inflows. Speaking to Financial Express, in an exclusive interview, Sitharaman said that political stability along with policy and tax stability, enhances India’s position in terms of being a destination for global capital.
India best placed for global capital looking beyond China
In a broad message to the foreign investors Sitharaman said that India offers strong fundamentals for long-term capital flows “So, for China plus one, which is for the world’s benefit, we should be in India. In a way, it’s the best place in terms of return on investment.” She said.
She highlighted that foreign investors know that India is a place to be, and Indian government will continue to improve that image. “I’ve in the recent past heard Norwegian investors wanting to come to India, and funds want to come from Canada. In fact, I’m planning visits to Norway and Canada also. So, we will attract funds. There is a realisation that India is the place to be. And we will only work to improve that. The EFTA countries are also very clear in sending messages that they want to come to India, they want to invest. They’ve given a promise of $100 billion. So, all that is well in the pipeline,” she noted.
Scope for more FDI and FPI relaxations?
On the question of whether investors can expect further easing of foreign direct investment (FDI) and foreign portfolio investment (FPI) limits in the future, the Finance Minister said such decisions rest with individual ministries.
“It depends on the respective departments. But in a majority of sectors, the limits have been relaxed,” she said, indicating that India has already opened up significantly to foreign capital across sectors.
Key reforms rolled out before Budget
Speaking on other key reforms she reiterated that several structural changes have taken place outside the Budget framework.
“We didn’t wait for the Budget to announce GST reforms and Labour codes were also rolled out beyond the Budget,” she said, adding that reforms are announced when departments are prepared to implement them effectively.
Sitharaman also said that capital inflow and investor sentiment will also improve after India US trade deal which has eased the tariff-related uncertainty. “Investors are like weathercocks; they move in the direction of sentiment. Sentiments will change. Money flowing in will happen now, much more than earlier,” she said.