Modi woos global investors as economy shows signs of recovery

Prime Minister Narendra Modi addresses the nation during Independence Day celebrations at the historic Red Fort in Delhi, August 15, 2020. REUTERS/Adnan Abidi/Files

(Reuters) – Indian Prime Minister Narendra Modi urged global investors on Thursday to invest in the country’s infrastructure and manufacturing sector as his government aims to bolster the economy amid some signs of recovery.

After contracting 23.9% in the April-June quarter, Asia’s third-largest economy has shown a marginal pickup following the easing of pandemic-linked restrictions, reflected in higher auto sales, power consumption and tax collections in October.

Economists have predicted the economy would contract by about 10% in the financial year ending in March 2021, before recovering as the country still faces a large number of novel coronavirus infections surpassing 8.3 million.

“If you want returns with reliability, India is the place to be,” Modi told a virtual conference of 20 major global investors, including sovereign wealth funds and pension fund heads from the US, Europe, Japan and Australia.

The meeting was also attended by other cabinet ministers and central bank governor Shaktikanta Das, besides Indian business leaders.

Modi said India would offer lower tax rates, tax incentives to manufacturers, along with ease of doing business, while following a path of fiscal prudence.

India planned to offer new opportunities to global investors as the government sells its stake in state run companies and monetises their assets while confining its role to a few strategic sectors, he said.

“We will do whatever it takes to make India the engine of global growth resurgence,” he said, citing recent reforms in the farm and labour sectors aimed at easing restrictions on investors.

During April-August, foreign direct investment inflows rose 13% from a year ago, Modi said, to $35.7 billion, the highest ever for the first five months of a financial year.