India to invest $2 bn in Sri Lanka in 4 years: Sitharaman

India will invest up to $2 billion in Sri Lanka over the next four years in a variety of sectors including real estate, energy and infrastructure, visiting Indian Commerce Minister Nirmala Sitharaman said on Tuesday. "In the next two to four years, the total investment interests will rise to $2 billion," Sitharaman told reporters here at the end of her three-day visit to the island nation. India is Sri Lanka's largest trading partner and both countries are considering a broader bilateral trade agreement.

After meeting here with Sri Lankan Minister of international Trade Malik Samarawickrema and other officials, Sitharaman said that Sri Lanka's decision to scrap a joint venture coal power plant project will not deter India's future investment plans in the country. "India understands Sri Lanka's need to move from coal power to more renewable power generation sources," she told. The proposed Economic and Technological Cooperation Agreement (ETCA) and issues concerning the existing free trade agreement (FTA) between India and Sri Lanka were discussed in these talks.

"We have been meeting the business chambers to assess their concerns," she said referring to her discussions.

Samarawickrema said the ETCA is expected to open up a market of 1.25 billion people in India. Both ministers said the negotiations on ETCA were reaching the final stage and both sides want to see it happening "as soon as possible".

Having worked with Indian companies, what do you think are the common mistakes Indian companies make while investing overseas?

India is like a new force of globalisation. Today, you see more and more Indian investors investing overseas mostly in the US and UK, followed by other European countries, Africa and South-East Asia. It is the first wave of globalisation. Of course, there are success stories and also failures. In the long-term, Indian investments will be very successful, if it is invested into the right sectors. The world needs India as a market and a force of innovation. This innovation is not limited to IT outsourcing, it also goes in bio-tech, fin-tech and also into traditional manufacturing. Also, Indian companies should be very careful, do the right diligence and should not overpay, while investing overseas. In the past, many companies have had an issue integrating and making things work. There is lot of room to grow especially in continental Europe where mid-size companies are for sale. There is an emerging trend where more and more European companies are looking for investments from India. It goes both sides and is beneficial for the market.

What is your take on Asian Infrastructure Investment Bank (AIIB)?

Clearly, India is also part of the bank. The Americans have some concerns around it but eventually it will change. Chinese-led AIIB is doing a good work. Maybe, it looks more political from outside, due to the Chinese interest. However, I do not think it is the case. If you look at AIIB's board members, you will see representative of various countries. Interestingly, UK was the first country to sign-up and now, Germany is on board. AIIB is not an alternative but an addition to World Bank.

Infrastructure is a key for economic development. It is the backbone of growth. Through this initiative 'One Belt, One Road' by the Chinese and other Asian countries, it is attempting to save globalisation and boost growth. Since 2008, we have seen demise of globalisation. Until 2008, everything was

I do not have the figures as the bank itself does not know it. However, Chinese have put some base financing. Hopefully, the United States will come on board as well.

I believe that AIIB should look at investing beyond Asian markets. IMF, World Bank and other banks will have to come forward to support African countries especially failing states that are out of the radar. For instance, Sudan, Central Africa and so on, are under war but very little is reported. By investing in infrastructure, one can stop war and reduce poverty in these regions. India understands it. Thus, it engages more in Africa by building hospitals, highways and other infrastructure, as it will help revive Africa.

What should India do more to invest heavily in African region?

There are many entrepreneurs in African region who are of Indian origin and this a great advantage India has over other developing countries. India needs to have an orchestrated state investment policy where they can connect with people of Indian origin. This helps to connect and arrange a reverse brain drain. India needs more trade missions and brings investments to both sides.

There are many central banks that are autonomous compared to their Indian counterparts. Do you think India should follow that path?

We cannot compare one country by another. What is good for one country might not be good for another country. It also depends on the stage of development. Europe and the United States need independent central banks. While emerging economies like India and China, require more guided approach,

Masala bonds are a great way of fund raising. India should not keep it for them but share it with others to chug on it as well. This would allow the investment to multiply. Masala bonds are one of my pet projects. I like the word to start with and Masala bonds need to globalise. We need to use these bonds all over the world. At least in financial capitals around the world, the Masala bonds should be on sale.

There is a lot of drama in Asian Market. Comment.

Yes, it is drama. Economy is always drama but I believe it’s always a drama with a happy ending. There are always road blocks across countries in the Asian continent. There are countries like Myanmar that are very poor, and then there are countries like Singapore. Then, you got countries like India, China and Japan. Country like Japan has different set of problems - aging society with no babies. Chinese’s population might also take the same route due to their one child policy but with India, large portion of its population is young and it is looking for work. Keeping all these factors in mind, I would say each country has different type of drama.