UAE investors have announced $2.5 billion worth of investments into India in October, it was announced at the ongoing India-UAE Partnership Summit (IUPS) being held at the Armani Hotel in Dubai, UAE.

This includes $1 billion (Dh3.67 billion) investment by Abu Dhabi Investment Authority (ADIA), $1 billion (Dh3.67 billion) by NRI-Emirati Investor’s Group and a further Dh1.7 billion investment by Lulu Group in Andhra Pradesh.

Cumulative foreign direct investment (FDI) equity flow into India reached $114.4 billion (Dh420 billion) during the last two financial years – 2015-16 to 2016-16, according to the latest report unveiled at the summit by global accounting firm KPMG.

This is about 40 per cent higher than the $81.8 billion (Dh300 billion) recorded in the preceding three years, from 2011-12 to 2013-14.

Cumulative FDI into India reached $498.9 billion in 17 years from April 2000 to June 2017, according to the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, India.

“In the financial year 2016-17, the country received the highest-ever FDI flow worth $43.5 billion (Dh160 billion),” KPMG said in its report. “India also witnessed an increase in private equity/venture capital investments led by its growing start-up segment. Between January and September 2017, India received $17.6 billion of private equity/venture capital spread across 402 deals.

The International Monetary Fund (IMF) has pegged India’s economic growth projections at 7.2 per cent for the current financial year, 2017-18 and it is likely to increase to 7.7 per cent in 2018-19. Higher infrastructure spending will play a vital role in achieving overall economic growth, the IMF said.

The holdings of sovereign wealth funds (SWFs) crossed 10 per cent share in the total Foreign Portfolio Investor (FPI) assets in India, as of May 2016, said Vikas Papriwal, Partner and Head of Markets, KPMG in the Lower Gulf and Middle East South Asia.
 “In the equity market, its holdings reached $33.7 billion, while they accumulated $5.1 billion across debt instruments.

“Furthermore, SWFs holdings crossed 10 per cent share in the total Foreign Portfolio Investor (FPI) assets in India, as of May 2016. In the equity market, its holdings reached $33.7 billion, while they accumulated $5.1 billion across debt instruments,” he added.

Asian Development Bank (ADB) said the infrastructure sector in India requires $5.2 trillion (Dh19.1 trillion) worth of investments to sustain the economic growth and lend support to several government flagship programmes.

“The infrastructure sector is one of the key drivers of the Indian economy. India's infrastructure market, currently the third-largest in Asia, is anticipated to reach $6.6 trillion by 2025, constituting 12.5 per cent of the Asia-Pacific region.  As of 2016, the sector contributes nearly 8 per cent to India’s GDP,” said the report.

The report was released in the presence of Sultan bin Saeed Al Mansouri, UAE Minister of Economy and Abdullah Al Nuaimi, UAE Minister of Infrastructure Development and Mohammed Sharaf, Assistant Minister for International Cooperation, UAE, and more than 800 VIP delegates including senior government officials and business leaders at the inaugural edition of the IUPS.

“The report highlights the economic and investment landscape of India and the opportunities lying in front of the investors,” said Vipul, Consul General of India.

“We would urge the investors and businesses in the UAE to look at the huge opportunities and the talent pool in India and become part of one of the biggest economic growth stories and take advantage of the opportunities.

“The recent legal and financial sector reforms haves made the Indian economy more agile and transparent and our government is determined to create a more enabling environment where foreign investment creates a win-win situation for all – Indian economy, investors, local businesses and human resources – in terms of job and value creation.”

The report issued by KPMG on behalf of the IUPS, was commissioned by the Business Leaders Forum (BLF), organiser of the IUPS.

Invest India, the foreign investment promotion body of India, said it will attract $100 billion foreign investment in the country, of which $85 billion has already been committed by 600 large businesses that will create 700,000 jobs, according to recent reports.

FDI inflows into the country grew 8 per cent and touched a new high of $60.08 billion in 2016-17, according to Department of Industrial Policy and Promotion (DIPP). Cumulative FDI inflow from April 2000 till March 2017 reached $484.35 billion.

The high-level and high-powered IUPS is split into a number of brainstorming business sessions and panel discussions on hot topics, including Investment Implementation, Infrastructure and Tourism while ministers of two Indian states – Uttar Pradesh and Telengana – will present investment opportunities in key projects within the states and seek investment from potential partners in the UAE.

Sudesh Aggarwal, board member of the BLF, chairman of the IUPS Organising Committee and chairman of India Trade and Exhibition Centre (ITEC), said: “The report by our knowledge partner KPMG shows that the bilateral trade between the two countries is expected to cross the $100 billion mark by 2020, from the current levels of $53 billion in FY17, there is an expectation that both the countries will realise a closer economic partnership.

“India has emerged as one of the leading investment destinations for UAE-based firms, as it received $1.2 billion FDI flows from the UAE in 2016, forming almost 90 per cent of the total investments received from the countries of the GCC.” – TradeArabia News Service