India is considering allowing foreign investment funds to buy stressed loan portfolios of banks, a move which is expected to see billions of dollars invested by institutional investors from the Middle East and other regions.
Currently, banks are only allowed to sell their stressed loan portfolios to asset reconstruction companies.
"The finance ministry has mooted some suggestions to relax norms related to investments by foreign funds in India's stressed assets and one of the suggestions is to allow them (foreign funds) to acquire stressed loans from banks," a senior federal corporate affairs ministry official told Arabian Business.
The finance ministry has mooted some suggestions to relax norms related to investments by foreign funds in India's stressed assets and one of the suggestions is to allow them (foreign funds) to acquire stressed loans from banks"
Foreign Direct Investment (FDI) in India grew by 6% to $42bn last year, according to the UN Conference on Trade and Development (UNCTAD).
"Investment was strong in manufacturing, communication and financial services -- the top three industry recipients," said the UNCTAD World Investment Report 2019.
UNCTAD's Director of Investment and Enterprise James Zhan said the growth was because prime minister Narendra Modi's office and agency for it are "very dynamic in promoting investment".
Speaking to reporters by video conference from Geneva, Zhan said that the offices were making efforts to attract a wide range of investment and "have been very effective; investment in India has been at a very high level, over $40bn annually".
After coming in second to Mauritius for two years, Singapore regained top spot as India's largest source of FDI in the 2018-19 financial year, which ended in March. For the last fiscal, $16.2bn of foreign investment originated from the Lion City.
This according to the latest report just published by India's Department for Promotion of Industry and Internal Trade (DPIIT). Mauritius, which came in second with $8bn of investments in 2018-19, was the top source of FDI for financial years 2016-17 and 2017-18 with $15.7bn and $15.9bn respectively.