India intends to invest $1.2 trillion in infrastructure for foreign investors

India intends to invest $1.2 trillion in infrastructure for foreign investors

India will spend 100 trillion rupees ($1.2 trillion) to create infrastructure, including logistics and information, which will increase the investment attractiveness of the country. This was reported on October 3 by the Indian edition of the Economic Times.

According to him, the government of Prime Minister Narendra Modi sees a digital portal as part of the project, which will unite 16 ministries. With its help, enterprises and investors will be able to receive “one-stop solutions for project development, their smooth approval and cost calculation,” writes Economic Times. While information about the new project is known only in the most general terms, the timing of its implementation is not indicated.

This will help her catch up with China

According to the Indian authorities, the goal of the program, called “Gati Shakti”, is to convince foreign companies to open production in the country. According to Amrit Lal Mina, Secretary for Logistics of the Ministry of Trade and Industry, the creation of the mentioned portal will allow “implementing projects without wasting time and money.” The cornerstone of “Gati Shakti” is the connection of future production nodes into one logistics network. Prime Minister Modi himself wants to increase the technological level of the country due to this. The Economic Times reports that India is experiencing serious difficulties with infrastructure projects – half of them are delayed, and one in four are over budget. Modi believes that bringing technology to the country will also solve this long-standing problem.

India intends to invest $1.2 trillion in infrastructure for foreign investors
New infrastructure project for investors in India could cost $1.2 trillion / Punit PARANJPE / AFP

The acceleration program will give New Delhi an edge over China. The moment for this is chosen aptly. According to the Economic Times, China is still quite close to the outside world. Under such conditions, companies adopt a China plus one policy, that is, they try to do business with someone other than China. India looks quite attractive for foreign business as a country because it can offer not only cheap labor but also a talent pool of English-speaking employees. However, Asia’s third economy also has problems – investors are deterred by unreliable Indian infrastructure. But even so, a growing number of Chinese-focused multinationals are starting plans to open one in India, including Apple and Tesla. On September 26, Apple announced the start of transferring the assembly of its iPhone 14 from China to India.

The Indian authorities are not interested in an economic confrontation with China, their goal is to get China to recognize itself as an equal partner, explains Alexei Kupriyanov, an expert at the Russian International Affairs Council. According to him, India also does not claim leadership in the region. New Delhi considers the processes taking place in the region as a potential opportunity, if not to overtake, then to catch up with China in economic terms. At a time when Western companies are leaving China, India seeks to attract foreign enterprises to itself through the maximum simplification of doing business, the expert concludes.

The economic rivalry between China and India cannot be sharp, as the countries attract investments of different levels, says Alexander Lomanov, head of the Center for Asia-Pacific Studies at IMEMO RAS. Now countries are at different levels of technological development. China has a large-scale industry and strong research and development base. High-tech companies are more likely to invest in China because it will provide businesses with highly skilled workers and engineers. In turn, India can afford to attract less technological investments, although, in several industries, such as the production of smartphones, they are approximately on the same level as China, Lomanov explains.

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