India has all ingredients to attract FDI: Chidambaram

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SME Times News Bureau | 18 Apr, 2013
Overseas capital is best protected in India and the country has all the ingredients to attract foreign direct investment, Finance Minister P. Chidambaram has said in a bid to woo investors from the US.

Addressing students and faculty of Harvard University, Chidambaram said: "Best guarantor of investment protection is a stable and democratic political structure, a belief in the rule of law, and a transparent and independent legal system. India has all three."

Chidambaram tried to allay apprehension of the global investors on India's tax policy, saying the changes won't be done on the whims of the government.

"Emerging markets have to increase the comfort level of international investors, to improve their sense that their capital is well protected," he said.

"After all, why would they invest over the long term if their capital can be expropriated by a change in laws or by the whims of the government," asked the finance minister.

Chidambaram urged investors in the US to increase investment in India, especially in infrastructure sector.

"India saves a lot - the savings rate at its lowest in recent years was about 30 percent of GDP. But India's savings fall short of its investment needs. Moreover, India needs intelligent risk capital that will ensure that investments are monitored and brought to fruition. And India needs long term patient capital that is willing to collect a return over many years," he said.