India’s Road Transport, Highways and Shipping Minister Nitin Gadkari during his visit to the world’s financial capital has been pitching the investment potential in India’s infrastructure as it embarks on its ambitious “Move in India” program and opens its roads and ports to foreign cooperation.
In a series of meetings with business leaders and investment professionals, organised here on Tuesday and Wednesday by the Indo-American Chamber of Commerce and the Business Council for International Understanding, J.P. Morgan and Goldman Sachs, Gadkari said he hoped that the multi-billion transportation plans could add two percentage points to India’s 7.6 percent GDP growth by creating a world-class infrastructure.
He invited US investors to participate in the highways development programme that envisages a total investment of $150 billion over the next five years. A range of projects exists to suit each investor’s risk and return expectations, he said.
Several innovations have been introduced to boost the development of roads, ports and waterways since the government of Prime Minister Narendra Modi was elected two years ago, Gadkari said.
One of these was the Hybrid Annuity Model under which 40 percent of the project cost is provided by the government as “a Construction Support” to the private developer during the construction period and the balance of 60 percent as annuity payments over the operations period along with interest on outstanding balances, he said.
Opening up the transportation sector to global investors, 100 percent foreign direct investment is permitted, with added incentives like 100 percent tax exemption for 5 years and 30 percent relief for next 5 years, he said. India planned to double the length of the national highways from the current 100,000 km to 200,000 km, he said.
With its vast coastlines and dependence on ports for about 90 percent of its export and import trade by volume, India was looking at $50 billion to $60 billion infrastructure investment, he said. The projects in the maritime sector include developing new ports and modernising existing ones, enhancing port connectivity and port-led industrial development with 29 clusters under 14 Coastal Economic Zones that have the potential to increase India’s exports by $110 billion in ten years. Other maritime and waterways investment opportunities are in the fields of ship-building and repairs and cruise tourism, Gadkari said.