The Indian government will organize a Global Investors Meet in the country every year to bring investment from sovereign wealth funds, pension funds in the country. The investors meet is expected to be organized on lines of the World Economic Forum summit which is held in Davos every year. The top corporate and political leaders across the world assemble in Davos every year discuss the prevailing socio-economic conditions. Soon a similar buzz may be seen in New Delhi or Mumbai.
“The government is contemplating organising an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as the anchor, to get all three sets of global players-top industrialists/corporate honchos, top pension/insurance/sovereign wealth funds and top digital technology/venture funds,” said finance minister Nirmala Sitharaman in her maiden Budget speech.
“It is high time India not only gets integrated into global value chain of production of goods and services, but also become part of the global financial system to mobilise global savings, mostly institutionalised in pension, insurance and sovereign wealth funds,” Sitharaman added.
NIIF, the quasi-sovereign wealth fund meant for attracting investment for roads, ports, railways and power plants will anchor the investors meet. China, the largest economy in Asia has already its own version of Davos summit which is known as Boao Forum for Asia.
Previously, PM constituted a five-member Committee on Investment and Growth which consists of Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Minister for Road Transport and Highways and MSME Nitin Gadkari and Railways Minister Piyush Goyal. This committee will be a focused group to take measures to bring investments and spur growth in the critical sectors including infrastructure, manufacturing and agriculture, as the economy is passing through a highly volatile period.
FDI policy was liberalized with 100% Foreign Direct Investment (FDI) being permitted in all 25 sectors, except for space (74%), defense (49%) and news media (26%). As a result, India emerged as the top destination globally in 2015 for foreign direct investment (FDI), surpassing USA and China to bring more investment.
In the last few years, India became the favorite destination for Foreign Institutional Investors as the total inflow in the first 6 months of 2019 reached 11 billion dollars which is highest since 2012. “The rapid rise of an educated middle class offers enormous opportunities for the deployment of long-term capital, the kind that sovereign wealth funds are ideally suited to provide,” said Ravi Menon, chief executive officer of HSBC Asset Management India
The greater inflow of investment has helped the nation to become a hub of manufacturing which is crucial for the growth of a country with such a large population. China, which has a massive population like us, depends on manufacturing to employ the majority of its population as jobs in the service sector are limited. The availability of capital along with cheap labour and proactive government will help India to become ‘factory of the world’ and push the GDP growth to double-digit which the policymakers dreamed for decades.
The Davos like Global Investors Meet would help the country to attract more foreign investment. The capital investment by sovereign wealth fund is long term as these firms look for stability instead of quick profitmaking. Therefore the investor summit would bring a good amount of cheap capital in the country.
