Modi’s $53 Billion Xi-Abe Windfall Hinges on Red Tape War
A bear hug, a riverfront stroll and a swing-set session helped Prime Minister Narendra Modi win more than $53 billion in loans and investment pledges from China and Japan this month.
Chinese President Xi Jinping yesterday in New Delhi pledged $20 billion in investment for Modi over the next five years to narrow India’s largest trade deficit with any single country. That adds to the $33 billion in loans and investment Japanese Prime Minister Shinzo Abe promised on Sept. 1.
Modi’s ability to draw funds from Asia’s two biggest economies is crucial to meeting his $1 trillion investment target by 2017 to revive Indian growth lingering near a decade low.
“It’s very difficult to pinpoint a number which these countries can reach because of the economic climate,” Siddhartha Sanyal, chief India economist at Barclays Plc, said by phone from Mumbai.
During a 2010 visit to India, former Chinese premier Wen Jiabao signed pacts valued at $16 billion, including $10 billion in equipment sales from Shanghai Electric Group Co Ltd. for three Reliance Power Ltd. power plants.
Japanese and Chinese foreign direct investment to India has totaled $17.5 billion since April 2000, with just $410 million of this from China.
“India’s capacity for being able to ingest and take in this kind of investment is limited,” Bhaskar said by phone from Delhi. “India needs to acquire that capacity and do so in a speedy manner”.
Source: bloomberg- Modi’s $53 Billion Xi-Abe Windfall Hinges on Red Tape War
