India a safe investment destination: FM to Indian diaspora
Finance Minister P Chidambaram told the diaspora that India has so far entered into 72 bilateral protection agreements besides Comprehensive Economic Cooperation Agreements (CCEAs) with some countries and was in the process of negotiating an agreement with ASEAN countries.
November 22, 2013 / 01:41 PM IST
Finance Minister P Chidambaram today assured the Indian diaspora community that their home country was a safe investment destination. He also assured stability of Indian rupee, saying it better reflected the true value after the RBI took urgent steps for managing the currency volatility.
"We believe that the exchange rate of rupee today is a better reflection of its true value and we are confident that both volatility and speculation have been largely contained," Chidambaram said at the opening of South Asian Diaspora Convention, 2013, which was attended by over 1000 delegates.
Also read: Headline inflation seen easing to near 5%: Chidambaram
He pointed out that RBI took a number of steps, some of which were clearly emergency ones to contain volatility. He said the good market response to the rupee bond floated by the International Finance Corporation two days ago indicated market confidence in the Indian currency.
"Although I would hesitate to draw conclusion at this early stage, all these, in my view augurs well for attracting investments," he said. Touching on the role of Indian diaspora, the Minister said since 2003, India has been the largest recipient of overseas remittances, which rose from the modest USD 2 billion in 1991 to USD 70 billion in 2013.
"Two months ago RBI opened a special window to attract funds into FCNR B - I am happy to report that as I speak to you today, the scheme, which will close on November 30, has received USD 16 billion.
The FCNR B allows the account holder to retain deposits in foreign currency and earn attractive interest. "In recent times we have turned our attention to successful Indian entrepreneurs and high networth
individuals," he said.
Chidambaram told the diaspora that India has so far entered into 72 bilateral protection agreements besides Comprehensive Economic Cooperation Agreements (CCEAs) with some countries and was in the process of negotiating an agreement with ASEAN countries. "I believe that taken together,the macro economic fundamentals and the micro economic fundamentals make India an attractive and safe investment destination".
The estimated 20 million Indian diaspora constitutes only about 2 per cent of India's population and their total wealth taken together is estimated at USD 1 trillion, which is nearly 50 per cent of India's GDP. Of the USD 1 trillion, one-half is estimated to be financial assets.
The income of Indian diaspora is estimated at USD 400 billion every year. "We take the diaspora seriously," Chidambaram said, while calling the gathering to invest in India.