In what could mark a paradigm shift in Indias foreign investment policy, the government is chalking out a new strategy to bolster overseas direct investments (ODI) by Indian firms. While Prime Minister Narendra Modi stressed on the Make in India slogan in his I-Day speech, in tune with the ruling dispensations nationalistic pride, ODI would be promoted as much as FDI inflows, official sources told FE.
The plan, according to the sources, includes ensuring easier access to credit from Indian banks, financial institutions (FI) and Exim Bank of India for local companies aiming to branch out abroad.
Domestic firms have complained of difficulties in getting international financing for their overseas expansion plans.
A proposal for an Overseas Investment Promotion and Protection Council, on the lines of the Foreign Investment Promotion Board, was also being considered, the sources added.
Besides, the ongoing review of Comprehensive Economic Partnership/Cooperation Agreements and Bilateral Investment Promotion and Protection Agreements will address companies concerns about protecting their investments overseas.
With the lessons learnt from the experience with the extant CECA/BIPPAs, similar arrangements in future, particularly with Latin American and African countries, would be structured in a way that Indian overseas investments are protected.
To back the latest initiative, the Prime Ministers Office recently asked the commerce ministry to write to all the 125 Indian missions and 38 honorary consuls overseas starting with the big economies and Indias major trading partners to inform them that they must monitor key economic and political developments in the respective countries and notify the departments concerned in India whether such events or change in policies will positively or negatively impact Indian industries. The missions will also be asked to update the government on the business opportunities, fiscal incentives, important exhibitions/fairs as well as the trade barriers (tariff and non-tariff) in the respective countries.
The strategy is to ensure that missions set ambitious internal targets such as how much annual exports from India do they foresee to the country where they are stationed in and the amount of two-way investment flow (from India to the country where they are placed an vice-versa). The performance appraisal of the staff also will be based on their ability to meet these targets.
The move, sources said, would not only benefit leading Indian companies such as the Tatas, Adanis, Mittals and Mahindras, but also small and medium enterprises, in turn transforming themselves into transnational giants possessing the latest