Govt looks to attract FDI in roads from China; seeks MoU

As the government moves ahead with its plans to attract more foreign direct investment (FDI) across various sectors, it is also eyeing FDI in roads from China. Ahead of Prime Minister Manmohan Singh’s visit to the nation in October, the road ministry has been preparing internal notes for FDI inflow to the tune of USD 2-3 billion, reports CNBC-TV18’s Ronojoy Banerjee, quoting sources.

A memorandum of understanding (MoU) is sought from China which will give the go-ahead to this move. Also read: FIPB to decide on 'hi-tech' aspect of FDI in defence output Government sources say that while FDI inflows in the highway sector has happened, Japan and UK are also potentially looking to invest in this space. The overall FDI in roads sector has been low. India had set a target of about USD 10 billion in the road sector by 2015. The Prime Minister will be visiting Beijing in the end of October and will meet the Chinese premier. A MoU facilitating more investments into the road sector and having financial arrangements in the road sector is on the cards, sources added. Road ministry officials are mindful of the concerns that the home ministry may raise with respect to China. They will make a negative list too that may include aspects like Chinese companies not being able to invest in road projects in North East and Jammu and Kashmir (J&K). By November, China is also looking at setting up an overseas investment department for opportunities in infrastructure projects in various countries in Africa, which India will also look to target. So, they are hoping USD 2-3 billion FDI. The government is hopeful on getting this MoU signed by the end of October. An approval from the Prime Minister’s Office (PMO) for the same is awaited.