| Finance minister P. Chidambaram flanked by CII president Y.C. Deveshwar (right) and JP Morgan Chase chairman William Harrison III in New Delhi on Friday. Picture by Ramakant Kushwaha
New Delhi, March 3: Going all out to woo US investors, finance minister P. Chidambaram today not only invited them to invest in manufacturing and service sectors but also gave the hint that the government might look into their demand for lifting foreign investment caps in insurance and banking sectors.
“Let me tell you, we want your money. Those who have money have the technology also. I want your technology. I want your good management practices, good governance norms as also market access in your country. Since you are a global market, we (India) want to reach other markets through you,” Chidambaram told chief executives of US firms at a conference jointly organised by the Indo-US Business Council and the Confederation of Indian Industry.
Stating that he was aware of some existing concerns in the financial services sectors, specifically insurance and banking, Chidambaram asserted that FDI limits were not entry barriers.
“The 26 per cent cap in insurance is not an entry barrier. Perhaps, it is a barrier for expansion. But Indian market is still hugely untapped with only 10 per cent of people coming in the insurance net. Therefore, I invite insurance companies from the world over to come here,” he said.
On the banking sector, the finance minister said the sector was in the first phase of opening up. “It will provide a lot more opportunities and will be further liberalised after 2009 when the second phase begins,” Chidambaram said.
So far, India has attracted FDI worth $37 billion, of which only $5 billion came from the US, he said, adding that “both numbers are not impressive.”
He said FDI inflow was crucial for India to raise the overall investment rate. Only then will the country be able to achieve the targeted 8-10 per cent GDP growth.
“At present, India’s investment rate is 30 per cent while savings rate is 29 per cent of GDP. Besides, the country still requires 4 per cent of GDP to come from FDI,” he said.
Chidambaram told US investors that India is on a sustainable 8 per cent annual growth track.
The finance minister said every developing country, which has grown into a middle-income nation has engaged the US. “India also wants to be a middle-income country in the next 15 years. That requires engaging the US ' diplomatically, economically and through people-to-people contact,” he said.
Chidambaram said there were immense opportunities for US firms to invest in India in sectors like infrastructure, IT, hardware, automobiles, financial sector, leather, textile and gems and jewellery.
“This is a very different India from what we were 20 years ago. Next 20 years, we will be all the more different. All these are opportunities that beckon investment,” he said.