India-Oman plan JV for core projects
India, Oman to set up a joint holding company with $100 mn for making investments in the infrastructure sector.
By Deepshikha Sikarwar, TNN |
NEW DELHI: India and Oman have begun discussions to set up a joint holding company with an initial corpus of $100 million for making investments in the infrastructure sector. A delegation of Indian officials visited Oman recently to thrash out the details of this first-of-a-kind initiative, sources said.
Major business houses and investment institutions of both sides are also expected to contribute in the company. Details such as the structure of the company are yet to be worked out, they said. The initial corpus would serve as the seed capital and would be scaled up later.
The company will help fund projects in both countries. The proposal comes in the backdrop of India setting up an overseas financing vehicle in London to fund forex requirements of infrastructure companies.
The offshore subsidiary of India Infrastructure Finance Company would borrow foreign currency up to $5 billion from the Reserve Bank of India and provide foreign currency loans to Indian companies for meeting their import requirements.
According to government estimates, India requires an investment of about $475 billion over the next five years to build infrastructure for sustaining high economic growth of 8-10%.
Besides, foreign investors themselves have lined up more than $5 billion for investments in ports, airports, and energy and infrastructure services. In fact, a large number of investors from Gulf countries such as Oman are already participating in these India-dedicated funds.
The proposal was mooted by Oman during the visit of Oman deputy prime minister Sayyid Fahd Bin Mahmoud Al Said in December last. The initiative was listed in the joint declaration issued then. India and Oman share a close relationship and already have a joint venture in fertiliser sector ������ OMIFCO. The joint venture between IFFCO, Kribhco and Oman Oil Company was set up with an initial investment of $969 million.
Oman also is a member country of the Gulf Co-operation Council with which India is negotiating a free trade agreement. Bilateral trade between the two stands at about $1.3 billion.
Major business houses and investment institutions of both sides are also expected to contribute in the company. Details such as the structure of the company are yet to be worked out, they said. The initial corpus would serve as the seed capital and would be scaled up later.
The company will help fund projects in both countries. The proposal comes in the backdrop of India setting up an overseas financing vehicle in London to fund forex requirements of infrastructure companies.
The offshore subsidiary of India Infrastructure Finance Company would borrow foreign currency up to $5 billion from the Reserve Bank of India and provide foreign currency loans to Indian companies for meeting their import requirements.
According to government estimates, India requires an investment of about $475 billion over the next five years to build infrastructure for sustaining high economic growth of 8-10%.
Besides, foreign investors themselves have lined up more than $5 billion for investments in ports, airports, and energy and infrastructure services. In fact, a large number of investors from Gulf countries such as Oman are already participating in these India-dedicated funds.
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The proposal was mooted by Oman during the visit of Oman deputy prime minister Sayyid Fahd Bin Mahmoud Al Said in December last. The initiative was listed in the joint declaration issued then. India and Oman share a close relationship and already have a joint venture in fertiliser sector ������ OMIFCO. The joint venture between IFFCO, Kribhco and Oman Oil Company was set up with an initial investment of $969 million.
Oman also is a member country of the Gulf Co-operation Council with which India is negotiating a free trade agreement. Bilateral trade between the two stands at about $1.3 billion.
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