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November 15th, 2009

Prime Minister opens door wider for foreign investment

Prime Minister at India Economic Summit

In addition to Foreign Direct Investment (FDI), we welcome portfolio investment in Indian companies,'' said Prime Minister Dr. Manmohan Singh. Addressing the inaugural of the 25th India Economic Summit, Dr. Singh sent out a strong message on the need for further economic reforms, particularly in the financial sector, and welcomed investment through qualified institutional investors in Indian companies. Stating that the country has been able to withstand the economic downturn, he said a gradual phase-out of the stimulus measures would take place next year.

"In addition to FDI, we welcome portfolio investment equity in Indian companies by qualified institutional investors," Dr. Singh said in his keynote address at the summit, organised jointly by the World Economic Forum and the Confederation of Indian Industry, in New Delhi, on November 9.

Dr. Singh's statement, which will give a fillip to foreign institutional investors, came against the backdrop of unfounded fears in the international community that India could impose controls on capital inflows.

The statement was also significant because it was made just three days after the Government announced that unlisted profitable state-owned companies with positive net worth would be tapping the stock market in addition to a further disinvestment in companies that have less than 10 percent floating equity.

The Prime Minister said that through the disinvestment policy the Government hoped "to see faster progress in the sale of a portion of government shareholding in the domestic market and issue of fresh equities in respect of the selected companies".

Setting the broad agenda for reform, Dr. Singh emphasised the need to make the financial sector more competitive while ensuring an efficient regulatory and oversight system. "We need to develop long-term debt markets and deepen corporate bond markets," he said. This in turn, would "require strong insurance and pension sub-sectors", adding that some of the reforms, especially in insurance, would involve legislative changes.

Dr. Singh said the country hoped to achieve a growth rate of 7 percent with a normal monsoon next year compared to around 6.5 percent this year. "We resorted to a significant stimulus and we will take appropriate action next year to wind this down."

The country's gross domestic product (GDP) grew by an average of nearly 9 percent during the five years preceding the global financial crisis.

The country's medium-term objective was to achieve a growth rate of 9 percent. "Taking into account the fact that our domestic saving rate is now as high as 35 percent of GDP, this is eminently a feasible task," he added.

When World Economic Forum Founder and Executive Chairman Klaus Schwab asked him what his primary concerns were, Dr. Singh listed them as education and health. "It is my sincere hope that in the next couple of years, we can raise public sector involvement and investment in education to 6 percent of GDP. Public sector involvement in health is raised from 1.2 percent to 2 to 2.5 percent."

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Incredible India awarded

Tourism Minister Ms. Kumari Selja

The Incredible India campaign has received the World Travel Award for the best destination marketing campaign. Tourism Minister Ms. Kumari Selja received the award at a glittering event organised in London on November 9.

Ms. Selja also inaugurated the India pavilion at the World Travel Mart by lighting the traditional lamp the following day. The World Travel Market (WTM) is a premier international travel related event, which showcases the latest trends in the tourism sector.

Addressing the WTM, Ms. Selja said that a number of initiatives and events planned for next year have been initiated as measures to stimulate tourist numbers. The theme of the India Pavilion is "Commonwealth Games 2010", to be hosted in Delhi. The new creatives of the Ministry for the promotion of the Games as well as images of the mascot 'Shera' are being displayed at the pavilion.

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Omar Abdullah visits World Travel Mart

Jammu and Kashmir Chief Minister Omar Abdullah visiting World Travel Mart in London

Jammu and Kashmir Chief Minister Omar Abdullah took time out from state politics to visit the World Travel Mart in London, the world's leading travel business market, where 202 nations from across the world vie for travel business. He was there to promote Kashmir as a tourist destination.

While referring to the potential of tourism in the state, the Chief Minister said that the whole world was unanimous on the fact that the valley was "a heaven on earth" and that every individual had an inherent urge to visit the place. He said that "the heaven" was open for all so that they could visit it according to their convenience.

"Efforts are being made to make this place a round the year tourist destination," the Chief Minister said. It is not only during early spring, summer or autumn that the valley offers an excellent view, it does so throughout the year, he said. Skiing on high cliffs, and the snowfall during winters are amazing experiences in the state.Later, addressing a seminar organised by the Pacific Asia Travel Writers Association (PATWA) in London, Mr. Abdullah asked travel agents and facilitators to encourage international tourists to visit Jammu & Kashmir.

A large number of tourist development authorities have been established in order to develop new tourist destinations across the state, Mr. Abdullah added.

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170 mn capital infusion for JLR

GE Capital has signed an agreement with Jaguar Land Rover (JLR), the UK-based subsidiary of India's Tata Motors, to provide a working capital facility of up to 170 million for a five-year term.

In a statement, GE said the facility represented "an innovative structure" to finance JLR finished vehicle stocks between the points of production and onward sale to dealers on a revolving basis.

"We are pleased that our funding plans have further progressed and welcome the confidence shown by GE Capital in the Jaguar Land Rover business," the statement quoted JLR's CFO Ken

Gregor as saying.

GE Capital is one of the region's leading financial institutions - providing secured finance facilities to support small and mid-market customers in Europe, the Middle East and Africa (EMEA).

"The deal is further evidence of our commitment to supporting important industries in Britain and Europe," said Rich Laxer, GE Capital's EMEA president and CEO.

JLR had announced in October that it had arranged for funds of Rs. 37 billion including Rs. 13.50 billion from State Bank of India.

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