India considers introduction of 'diaspora bonds'
Kingston (Jamaica): In a bid to attract investment from NRIs, India is considering introduction of "diaspora bonds" to facilitate greater inflow of funds in the infrastructure sector.
Overseas Indian Affairs Minister Vayalar Ravi said government was examining longer-term investment instruments for the overseas Indians so that the community can participate and benefit from India's "growth story".
"The bulk of diaspora investments are in portfolio investments of a short-term nature. We are considering longer term investment instruments like 'diaspora bonds' to provide opportunities for overseas Indians," Ravi said addressing the 5th biennial diaspora conference.
Underlining the need for greater two-way engagement between India and its diaspora, Ravi said government has initiated a number of initiatives to ensure greater participation of the community in economy of the country.
"Overseas Indians worldwide who are our brand ambassadors produce an economic output of about USD 400 billion. The Indian diaspora is estimated to generate an annual income equal to about 25 percent of India's GDP.
Yet, India's growth story so far has been driven primarily by the energy and enterprise of its domestic industry. The role of the Indian diaspora in India's economic growth holds far greater potential," he said.
Lauding achievements of about 25 million overseas Indians spread across 130 countries, he said the community can serve as an "important bridge" between the "home" and the world.
"Overseas Indians have made significant contributions to the economies of their countries of adoption and have added in considerable measure to knowledge and innovation," he said.
"Diaspora engagement is also seen in the strong surge in remittances back home, the return of many to live and work in India and in their increasing participation in India?s development," he said.
As per a World Bank report, India with USD 69 billion topped the list of countries receiving remittances in 2012, followed by China (USD 60 billion).
"The cumulative Foreign Direct Investment by NRIs is a modest USD 10 billion constituting less than 5 percent of the total FDI in India. We have taken steps to encourage NRI investments in India," he said.