Indo-US CEOs Forum to launch $5 bn fund
"Government is expected to receive the proposal for structure of the fund in the next few weeks," Kamal Nath says.india Updated: Oct 27, 2006 12:08 IST
The Indo-US CEOs Forum has offered to set up a $5 billion fund for infrastructure development projects in India provided it is run with "minimum government participation," Commerce and Industry Minister Kamal Nath said on Friday.
"The government is expected to receive the proposal for structure of the fund in the next few weeks," the minister said, adding that he expects "little government participation in the neighbourhood of 10 per cent."
The agreement to devise a mechanism to set up the fund was discussed at a closed door meeting of the forum held on Thursday which was attended by Finance Minister P Chidambaram and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia besides Nath.
On the retail market in agriculture, Nath said that though the field is not yet open to foreign companies, they could invest in cold storage and logistics.
Several American companies, including Walmart, have shown interest, he said, adding that some major announcements could to be made within the next few weeks.
Indian farmers, he said, lose a lot of their produce because cold storage facilities are not available and facilities for taking produce to the market are limited.
Hence, huge amount of fruits and vegetable are lost or sold by farmers at very low rates.
It is in this field that foreign companies could invest while current retail outlets are maintained, he said.
"Differentiation needs to be made between commercial farming in the United States and subsistence farming in India," he said.
India, he said, is prepared for negotiations with the United States on the subject but its concerns have to be met.
Besides, India also has other concern about tariff on its goods.
American Commerce Secretary Carlos Gutierrez and Allan Hubbard, assistant to the President for Economic Policy, were among those who participated in the forum.
William Harrison, Chairman of the Board of JP Morgan Chase, is the US chair of CEOs Forum and Ratan Tata is the Indian Chair.
During the visit of President George W Bush to India in March 2006, the CEOs Forum had given its recommendations to the two governments on strengthening bilateral economic ties.
It was also decided that further meetings of the CEOs Forum would be organised in the US and India to discuss measures to deepen economic ties.
These meetings of CEOs Forum are meant to enable CEOs from India and US to discuss further steps needed to strengthen ties with senior government representatives from both sides.
India-US bilateral trade and investment has been growing rapidly. US exports to India increased by 35 per cent to $9.5 billion in 2005-06 while US imports from India increased by 26 per cent to $17.4 billion.
India has also been receiving high portfolio investment in its stock market of more than $10 billion every year, a large portion of which comes from US.
American direct investments in India in both manufacturing and service sector are also growing rapidly.
In recent years, Indian direct investments in the US has increased substantially with $1.3 billion investment in last two years.