Are controversies like Singur worrying foreign investors?

Here is a verbatim transcript of Indira Kannan's comments on CNBC-TV18. Also watch the accompanying video.

Even as disputes over land acquisition for projects like the Tata Motors plant in Singur or the Reliance Special Economic Zone in raigad intensify, foreign investors are taking notice. The shape of their eventual resolution will determine if these disputes become red flags to potential investors.

The village of Singur has become familiar - not in a good way - in business circles even in unlikely places, like the american Midwest.

Madhu Vuppuluri, President, Essar Americas said, "The incidents such as Singur are definitely well covered in the international press. So even in locations like Minnesota, where we've been last week, we have noticed references of these incidents coming up in several forums and discussions."

At the Annual India Investment forum in New York this week, Indian experts firmly argued that the prolonged dispute in Singur over land for Tata Motors' Nano plant, or the controversy over the Reliance SEZ in Raigad is not typical of the country's industrial landscape.

VK Jairath, Infra and Industry Consultant said, "I can tell you from my experience, the Reliance SEZ issue has been there for the last two years and that hasn't stopped other SEZs coming up. In the time when the Reliance SEZ was held up, Bharat Forge has gone ahead and acquired 5,000 acres of land. The package is good. So these are location-specific problems. And i'm sure over a period of time there will be solutions to that. I don't see any kind of hold-up on that account."

But global investors warn that unless disputes like the one in Singur are resolved amicably, India's image will take a hit among foreign investors.

Parag Saxena, CEO, New Silk Route Private Equity said, "If the plant never comes up, it will raise issues because people will say if a group that's as well established as the Tatas was unsuccessful at getting something done, then how can we poor foreign investors without the same influence get something done? But if what i suspect will happen, that the matter will eventually get ironed out, even though it may take 6-9 months. The Tatas may go and build a plant elsewhere, maybe Uttarakhand or some other place will be the beneficiary of their need to provide production when the market demands it, i think it will be ok. If the plant is never built, it will be a bad sign for India."

The dispute in Singur by itself is not a deterrent to foreign investors. They are more interested in watching how it all plays out in the end, and if the solution holds some positive signals.