Mumbai: A weeklong “Make in India” fair closed on Thursday with $222 billion in investment pledges, but thin attendance by foreign firms at the event launched by Prime Minister Narendra Modi means many are unlikely to actually happen.
The Mumbai jamboree was the biggest in India, but earlier events such as the “Vibrant Gujarat” launched by Modi when he led the state have only seen 13 per cent of deals implemented, according to independent research.
Amitabh Kant, Secretary of India’s Department of Industrial Policy and Promotion (DIPP), told reporters investment commitments had reached Rs15.2 trillion (Dh821.6 billion, $222 billion).
The commitments fell some way short of the Rs25 trillion announced at the three-day Vibrant Gujarat event a year ago.
Kant said he expected 80-85 per cent of the pledges to convert into serious business, much of it from foreign investors. It can take 18 months to three years for a memorandum of understanding to yield a final investment, he added.
“This was the biggest multisectoral event ever done across Asia,” he told a briefing, describing the event as a success.
Research commissioned by the free-market Friedrich Naumann and Cato institutes has found the rate of conversion of such pledges into real investments in India has typically been far lower — with no state exceeding 20 per cent.
Among investments signed in the last seven days were a commitment by Oracle Corp for $400 million to set up nine business incubation centres.
Though some participants who spoke to Reuters lauded the event, several complained about a lack of foreign involvement.
“The response is overwhelming, but mostly from Indians.
There are Indians everywhere. Usually in Germany, in events like these, stalls are thronged by foreigners,” said Ingo Eibbeck, a representative of German manufacturer Schneider International.
India’s GDP to grow next fiscal at 7.5%: Moody’s
US agency Moody’s Investors Service on Thursday forecast for India a “stable GDP growth at around 7.5 per cent in 2016 and 2017”, saying the country is relatively less exposed to external headwinds, like the Chinese slowdown, and will benefit from lower commodity prices.
India is relatively less exposed to external factors, including China slowdown and global capital flows. Instead, the economic outlook will be primarily determined by domestic factors, Moody’s said in its report “Global Macro Outlook 2016-17 — Global growth faces rising risks at time of policy constraint”.
“Together with Turkey and China among the G20 emerging markets, India benefits from lower commodity prices: In 2014, net commodity imports amounted to 5.9 per cent of India’s GDP, compared with net exports worth 1.3 per cent, 3.3 per cent and 4.3 per cent for South Africa, Brazil and Indonesia respectively,” it said on Thursday.
“In the five years to the end of the decade, we expect GDP per capita (at market exchange rates) to increase by 34 per cent in real terms in India, compared with only 3.6 per cent in the G20 emerging markets, excluding China and India,” the report added.