Dear Tom, not only this, UK is seeking 
FDI from India (Isn’t it a pleasant development)
UK seeks FDI from India
Kolkata, Dec 12. (PTI): Riding high on a robust economic growth, UK today made a strong pitch for attracting Foreign Direct Investment (FDI) from India
http://business-times.asia1.com.sg/story/0,4567,103501,00.html
**The re-rating of India **
The Business Times, December 24, 2003
LAST week, India’s central bank, the Reserve Bank of India, announced that the country’s gold and foreign exchange reserves had crossed the US$100 billion mark.
This is but one indicator of the boom underway in Asia’s third largest economy, which now deserves a close relook, and a re-rating.
India’s external reserves have soared by about US$30 billion this year alone, on the back of higher export revenues and remittances, larger flows of foreign direct, as well as portfolio, investment, and rising prices of gold - of which India has among the biggest hoards in the world. The strong reserves position was one of the factors that prompted rating agency Standard and Poor’s to recently upgrade India’s sovereign BB long-term foreign currency rating outlook from ‘negative’ to ‘stable’.
However, India’s reserves jump is but one piece of a much larger story, to which close attention should be paid:the Indian economy is in a boom-mode, which could well turn out to be sustainable, provided the momentum of reforms is accelerated. With the country’s foreign exchange constraint now removed, this is a distinct possibility. As the country’s Finance Minister Jaswant Singh pointed out recently: ‘Our reserves will add greater momentum to bolder economic reforms, enabling the country to achieve significantly higher growth.’
India’s growth story has also got better. Thanks to a good monsoon and strong performance by all major sectors, the economy is on track to achieve a growth rate of 7 per cent in the current fiscal year (ending March 2004), after a mediocre 4.3 per cent expansion in 2002/03. Last week, the World Bank, which endorsed that forecast, predicted that India’s economy would grow at 6-8 per cent ‘for the next few years’.
Nor is India’s growth just an IT and pharmaceuticals story, as some reports might have people believe: it is also an agriculture story, an infrastructure story, a wider services story, and - surprise, surprise - an increasingly broad-based manufacturing story as well: the top categories of export performers in recent years have included (apart from software, IT services, and pharmaceuticals) cars, motor cycles, auto components, cement, chemicals, a variety of engineering goods as well as textiles.
India’s brightening economic prospects present the government with a major opportunity to tackle some serious underlying problems and to accelerate reforms in areas where they are still slow. One of the most serious problems remains India’s fiscal deficit. The consolidated deficit ofthe central and state governments is around 9 per cent of GDP, one of the highest in the world, while total domestic government debt stands at more than 80 per cent of GDP - which is partly why rating agencies like S&P have not upgraded local currency debt ratings.
Structural reforms are another area where improvements are slow. India’s labour laws remain rigid, with industry still hampered in its ability to fire workers. Privatisation too, while proceeding faster than many expected, has been slowed down by vested interests and political ideologues. So have land and rent laws in cities, which are archaic and a serious impediment to urban renewal.
Election time
India’s poor infrastructure is another obstacle to sustained growth, although it seems this is now being addressed in earnest, at least when it comes to telecoms, roads and industrial facilities. With a general election now less than a year away, one must be cautious in an assessment of the likely speed of reforms going forward - especially painful ones like those affecting land and labour laws, as well as subsidies. However, in other areas, such as infrastructure, the electoral cycle will probably favour an acceleration of reforms. On the whole, it seems unlikely that politics will seriously undermine India’s growth. That growth will create huge new opportunities for domestic and foreign investors alike. Now more than ever before, Singapore companies must keep on top of the India story, or risk being left on the sidelines.
FDI from India (Isn’t it a pleasant development)