Gulf SWFs interested in investments,PMO to take call on pre-conditions

After Japan,India is targeting four Gulf nations to fill the foreign exchange void created by the fleeing dollar. On Monday,the Prime Ministers Office would discuss modalities with key economic ministries to meet the pre-conditions set by the United Arab Emirates,Kuwait,Qatar and Saudi Arabia for parking part of their sovereign wealth funds (SWF) as foreign direct investments (FDI) in the country. One key decision would be finalising the Bilateral Investment Promotion & Protection Agreement (BIPPA) with the UAE Indias largest trading partner in 2012-13 which pledged an initial $2 billion this February for investments in infrastructure projects and support for establishing a strategic oil reserve in India. There is an urgency to resolve the BIPPA as the second meeting of the High Level India-UAE Task Force on Investments is likely this month. The UAE has the largest SWF at $750 billion but scrutiny by Indian agencies in investments by telecom firm Etisalat and real estate developer Emaar has become a sore point for future commitment. The BIPPA the agreement that guarantees a slew of rights to the foreign investors is yet to be signed between both countries. UAE looks upon early resolution of the stalemate on BIPPA as a pre-requisite for further investment commitments, says the agenda from the external affairs ministry. The other specific that could be determined at the meeting is Qatars request for additional seats for its national carrier. This nation,with SWF of $100 billion,is being targeted by NTPC for investment in Kayamkulam expansion project and by Indian Oil Corp for a crude oil storage facility. Kuwait with a SWF of $300 billion is the most forthcoming among the four with collective India investment of $2.5 billion. It is interested in brownfield projects in the oil and gas sector,but the PMO has asked the ministries to outline big-ticket specific proposals which are high return and relatively hassle free for Kuwait,and also for Qatar and the UAE. Saudi Arabia,with the second largest SWF of $530 billion,would be shown projects assuring good returns. FDI inflows are needed to control a wide current account deficit that has led to a depreciation of the rupee. India signed a currency swap arrangement of up to $50 billion with Japan to tide over any forex crisis. Amitav Ranjan