Indian FM plans foreign roadshows to spur capital inflows

Tuesday, 15 January 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Finance Minister P. Chidambaram plans to meet investors in Asia and Europe this month in a drive to try and boost capital flows into Asia’s third-largest economy, four sources with direct knowledge of the plan said.

He is expected to start his foreign tour in Hong Kong on 22 January and visit Singapore the following day, and will be seeking to reassure investors given concerns about the health of the Indian economy and fate of proposed reforms, the sources said. They did not wish to be named as the details are not yet public.

Chidambaram, who will be accompanied by Economic Affairs Secretary Arvind Mayaram, also plans to visit Frankfurt and London after the Asia road shows, the sources said.

India’s economy is set to post its lowest growth in a decade in the fiscal year ending in March and its investment grade credit rating is at risk if the government fails to mend its finances and rein in a bloated fiscal deficit.

The current account deficit widened to 5.4 per cent of gross domestic product in the September quarter, although Chidambaram said this month that foreign investment flows should be able to finance the deficit without drawing on currency reserves.

Banks including Citigroup, Bank of America Merrill Lynch and Deutsche Bank are organising the road shows, the sources said. The Mumbai-based spokesmen for the banks declined to comment.

Chidambaram may visit the United States to meet institutional investors after presenting the federal budget next month, two of the sources said.