Finance minister Arun Jaitley on Thursday embarked on a four-day visit to Asian financial hubs Singapore and Hong Kong to convince investors to invest in India’s infrastructure and manufacturing sectors.
The visit is in sync with the Narendra Modi government’s strategy to capitalise on India’s standing as a bright spot in the global economy due to its strong macroeconomic fundamentals even as the current spell of economic uncertainties due to worries on Chinese economy, Greek debt crisis and fresh Fed rate hike tantrums, has made many countries defensive due to capital outflows to safer havens.
A Fed rate hike could potentially have adverse implications for emerging market economies given that it could trigger capital outflows from them.
In the first leg of his visit on September 18-19, Jaitley will address Singapore summit on ‘India: A Heaven of Opportunity in Globally Challenging Times’. The summit is an annual investment event organised by the government of Singapore with participation from various Asian countries.
Jaitley will also interact with prominent investors and fund managers, including meetings with Temasek and GIC, Singapore government-owned wealth funds and also hold talks with pension funds regarding their participation in India’s National Investment and Infrastructure Fund. Besides addressing a meeting of Singapore businesses, he would also meet Singapore Prime Minister Lee Hsien Loong and other ministers during his stay.
During his visit to Hong Kong, the minister would address investors at the Capital Markets and Institutional Investors’ Summit organised by the Asia Pacific Investors Cooperation. The summit will present to select Asian institutional investors the developments in India’s capital markets and investment opportunities.
He would also have small group meetings with financial sector investors and fund managers. His itinerary also includes meetings with Hong Kong Trade Development Council and Greater China Chamber of Commerce.
Jaitley’s overseas investors meeting coincides with possible US Fed rate action later on Thursday. The Fed began a two-day policy meeting on Wednesday with analysts split on whether it would raise interest rate for the first time since 2006. As India’s macroeconomic fundamentals (such as economic growth, fiscal deficit, current account deficit and inflation) are strong, the government does not expect the impact on rupee to be like in 2013, when Fed tapering tantrum plunged rupee to its lowest level of 68.8 in August that year due to significant capital outflows.