Some experts suggest that India may attract the huge foreign exchange reserves of China, estimated to be about $3 trillion, towards its infrastructure sector.
Experts suggest the Indian government to attract foreign direct investment (FDI) from China into the infrastructure sector, which needs $1 trillion funding during 2012-17.
Such FDI should initially be confined to long gestation, infrastructure projects with a sovereign guarantee of an annual return of around 7-8 percent, experts said.
The benefit of such infrastructure investments into India have already been tasted by the Japanese, via their funding of the Delhi Metro, and now the Delhi-Mumbai Industrial corridor, experts argue.
In order to avoid security issues, the Chinese investment should initially be a purely financial one, experts said. It may be noted that there are controversial issues of funding telecom, and the issue of tied purchase of Chinese telecom equipment.
It may be recalled that Chinese President Xi Jinping expressed his intention to strengthen the country’s ties with India during an interaction with the Indian press in March.
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