India is planning a major overseas shopping drive to ensure secured supply of scarce natural resources such as crude oil, gas, iron ore and coal to push the country’s strategic and domestic needs.
The government is putting together a comprehensive policy framework that includes setting up of a specialised cell to help firms, including private sector companies, acquire these scarce resources.
India is waking up to the fact that countries such as China have made a head-start in the race for natural resources.
In a meeting convened by the Prime Minister’s Office (PMO) last month, it was decided that the department of industrial policy and promotion (DIPP) will draft a formal policy.
“DIPP will seek cabinet approval to a government policy on facilitating outward investment by Indian private sector companies,” said a senior official.
A centralised nodal cell will be set up, empowered with strategic and decision-making powers. The cell is likely to be located either in the PMO or in the cabinet secretariat.
“Outward investment by the private sector companies may be for many purposes, acquisition of raw material resources being one,” the official said.
“What is required is a policy statement to avoid criticism from any quarter on why government agencies are promoting the cause of private companies, and to create a mechanism to provide necessary help wherever required,” he said.
State-owned companies such as Coal India, NTPC and Steel Authority of India are eyeing purchase of mines in Australia, Africa, Indonesia, the US, Chile and Namibia, and are ready with detailed acquisition plans.
The external affairs ministry has been asked to work out a strategy as acquisition of such resources in many countries would require a diplomatic push.