Israel India | Business Guide | 2017

Israel-India > Business Guide > 2017 092 > ‏ Infrastructures > Review ‏ T he Infrastructure sector is largely responsible for propelling India’s overall development.The Ministry of Road Transport and Highways & Shipping, has announced the government’s target of Rs 25 trillion (US$ 376.53 billion) investment in infrastructure over a period of three years, which will include Rs 8 trillion (US$ 120.49 billion) for developing 27 industrial clusters and an additional Rs 5 trillion (US$ 75.30 billion) for road, railway and port connectivity projects. ‏ Market Size •‏ 70 per cent of funds (US$ 454.83 billion) for the next 5 years are needed for power, roads and urban infrastructure segments. •‏ The Indian power sector itself has an investment potential of US$ 250 billion in the next 4-5 years, providing immense opportunities in power generation, distribution, transmission and equipment. ‏ • The Indian construction equipment industry is expected to grow to US$ 5 billion by FY2019-20. Major Investments Planned in India's Infrastructure Sector ‏ Investments ‏ • The Asian Development Bank (ADB) has approved US$ 631 million loan to develop the first coastal corridor, namely the Vishakhapatnam-Chennai industrial corridor. ‏ • The Asian Development Bank (ADB) and Government of India signed a loan agreement of US$ 80 million, that will be invested for improving water supply, solid waste management and sanitation in the cities of Agartala and Aizwal,the capital cities of Tripura and Mizoram respectively in the North-East part of India. ‏ • Maharashtra State Government plans to launch infrastructure projects worth US$ 10.78 billion in Mumbai and neighboring areas in 2016,which include coastal road,Trans harbor link, metro rail, airport and road projects. ‏ • The Government of India has earmarked US$ 7.34 billion to develop 100 smart cities across the country.The Government released its list of 98 cities for the smart cities project in August 2015. ‏ • The Government of India has announced highway projects worth US$ 93 billion. ‏ Government Initiatives ‏ • Plans to boost regional connectivity by setting up 50 new airports over the next three years. ‏ • Plans to invest over US$ 1.04 billion in FY2016-17 to develop its network in the north-eastern region for better connectivity. ‏ • The Reserve Bank of India (RBI) has allowed companies in the infrastructure sector to raise External Commercial Borrowings (ECB) with a minimum maturity of five years. ‏ • The Securities and Exchange Board of India (SEBI) has allowed Foreign Portfolio Investors (FPI) to invest in units of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). ‏ • Government plans to use the new hybrid- annuity model for allocating contracts under the Public Private Partnership (PPP) projects in highways, Namami Gange and Railway Projects. ‏ • The Union Ministry of Urban Development has approved an investment of US$ 72million for water supply, sewerage networks and septage management, storm water drains, urban transport and provision of green spaces in 13 cities over six states. ‏ • The Ministry of Urban Development has approved an investment of US$ 2.81 billion for improving basic urban infrastructure in 474 cities in 18 states and Union Territories. ‏ • The Government of India plans to award 100 highway projects under the public- private partnership (PPP) mode in 2016,with expectations that recent amendments in regulations would revive investor sentiments in PPP projects in the infrastructure sector. ‏ • The Reserve Bank of India (RBI) has notified 100 per cent foreign direct investment (FDI) under automatic route in the construction development sector and the Government has relaxed FDI norms in construction. ‏ Road Ahead ‏ • Indian port sector and Indian aviation are poised to make great progress in the years to come. It is forecasted that by the end of 2017 port traffic will amount to 943.06 MT for India’s major ports and 815.20 MT for its minor ports and project investment in aviation will be US$ 120 billion. ‏ Source:India Brand Equity Foundation,Dept.of Commerce & Industry, Govt. of India Investments will boost economy and increase output photo by: © Singhlens, Dreamstime.com