Notwithstanding the Enron impasse on Dabhol Power Project, India has emerged as one of the most favourable destinations of European and American investors among the Asian nations and the country is set to receive huge foreign direct investment in coming days, the World Bank's investors guarantee representative said on Friday.
"Make no mistake that India is definitely one of the leading contenders of FDI in Asia and American and European investors are increasingly evincing keen interest in investing here. We would give three-star rating to India implying that the FDI scenario here looks upwardly mobile," Luis Dodero, Vice-President and General Counsel of the Multilateral Investment Guarantee Agency said in New Delhi.
Dodero said that following the Enron impasse the foreign investors were shaky for a while but the subsequent implementation of well-conceived measures by the Indian government has re-infused fresh enthusiasm among the foreign investors and if liberalisation process continues then there would definitely be a surge of foreign investments.
Dodero informed that MIGA has formed a partnership with the EXIM Bank of India and Export Credit Guarantee Agency of India to provide Indian companies investing overseas with a package of services that combines financing and risk insurance.
Another MIGA official said that with the rush of Indian companies starting to invest abroad, this partnership allowed Indian investors to seize new opportunities in emerging markets overseas.
"EXIM Bank will provide the required finance while the ECGC and MIGA will provide insurance against political and non-commercial risks and will work together largely through re-insurance or co-insurance arrangements."
Earlier, addressing a gathering, Dodero informed that MIGA's guarantee programme besides minimising non-commercial risks also helps tackling currency inconvertibility and transfer restrictions and also seeks to protect investors against war and civil disturbance including terrorism entailing losses resulting from physical damage to tangible assets from substantial interruption of business.
MIGA, which was formed in 1985, has a Centre for International Settlement of Arbitration and Disputes and other risk-management tools to protect investors against non-commercial risks," another MIGA official said.
"The global economic downturn and decline in investment flows to the developing world in the wake of a changing global economy is everyone's concern and what has been seen in that prospective investors are wary of investing in a politically uncertain nation and so at a time when India has been ranked as the third largest developing power, it is highly desirable that Indian entrepreneurs try and invest in other developing nations including Africa for which the MIGA would provide technical assistance and if required investment dispute mediation," Dodero added.