New Delhi, Sep 21 (UNI) Stating that India was a safe and rewarding opportunity, Minister of State for Finance Pawan Kumar Bansal has asked Australian companies not to miss the opportunity of investing in the country.
"India's growing and stable investment climate present immense opportunities for Australian companies, particularly in the energy and infrastructure sectors", Mr Bansal said addressing the India Business Council Investors,'' Meeting in Sydney last evening.
He said it offers a huge market and enormous business potential with a growing middle class in the country.
The Minister said India also has the potential of becoming the trade and business centre of South Asia and East Asia with its proposed regional trade agreements with several countries. It is also to become a part of the emerging trade blocks in the near future.
He expressed the hope that Australian companies would find India an attractive destination for their business expansion plans, a relationship that will be mutually rewarding for both the countries.
Mr Bansal noted that trade between the two countries has been continuously expanding. The bilateral goods trade between India and Australia has seen a growth of 34.51 per cent between 2005-06 and 2006-07.
The total bilateral trade during 2006-07 was 7.7 billion dollars making India the Eleventh largest trading partner of Australia.
Mr Bansal said Indian investments in Australia were now well over one billion dollars, mostly in the IT sector.
On the other hand, Australia ranks Tenth and accounts for only about 2.37 per cent of total FDI approvals with 1.92 billion dollars. Of this the inflow of FDI investment from 1991 to May 2007 has been of the order of 208.8 million dollars.
''FDI investment from Australia reflect neither the potential of Australia to invest, nor the absorptive capacity of India," Mr Bansal said .
He urged Australian Investors to explore the natural complementarities" between the two economies to achieve optimum levels of economic engagement between the two countries.
Mr Bansal said the high level of investment by Foreign Institutional Investors in Indian stock markets also reaffirms the confidence which the investors have in India's potential. The FII investment was 10.9 billion dollars in the year 2003-04, 8.6 billion dollars in 2004-2005 and 9.2 billion dollars in 2005-06. In 2006-07 the net investments were 6.14 billion dollars up to Februrary, this year.
Mr Bansal said to further widen and diversity the investor base, the limit of FII investment in corporate debt in India has been increased from 1.5 billion dollars to two billion dollars in April, 2006.
He said investment cap on Government securities has also been increased from 1.5 billion dollars to two billion dollars in April 2006.
"This positive trend reflects the strong economic fundamentals of the country as well as the confidence of the foreign investors in the growth and stability of the Indian market", he said.
Mr Bansal said India's GDP has shown a growth rate of 9.4 per cent in 2006-07. Higher domestic savings and accelerated FDI inflows have contributed to this growth in investment.
"India offers one of the safest investment opportunities in terms of country risk too," Mr Bansal added.