FIRMS PLAN US$6B SPENDING?
‘Lotte and PSA discuss investments in sectors such as food, real estate and car’
NEW DELHI
SOUTH Korean conglomerate Lotte Group and French carmaker PSA Group have discussed proposals to invest as much as US$6 billion (RM24.67 billion) combined in India, a move that would boost Prime Minister Narendra Modi’s attempts to attract foreign capital in Asia’s third-largest economy, said a person with direct knowledge of the matter.
Lotte may invest between US$3 billion and US$5 billion in the next five years, said the source. The South Korean firm intends to invest in retail, chemicals, food processing and real estate, as well as develop railway platforms in the country. Separately, PSA, the maker of Peugeot and Citroen cars, plans to spend about US$1.2 billion to build a car factory and an engine plant in southern India, said the source.
Modi’s flagship “Make in India” plan encourages foreign firms to manufacture locally by offering easier land acquisition, pruning the number of approvals and, in some cases, offering incentives. The efforts have helped India move up in the World Bank’s ease of doing business survey and achieve an unexpected credit rating upgrade last week by Moody’s Investors Services.
Lotte plans to develop urban real estate by adopting railway stations and maintaining them, said the person. In return, the railways will allow the South Korean firm to operate restaurants, hotels and shops, the person said. The confectionery arm of Lotte is in the process of setting up a new factory in India.
The Indian government is discussing more than 550 foreign investment proposals worth about US$85 billion, offering competitive terms to companies and ensuring uninterrupted supply of power and water to plants, the person said. The proposed projects include setting up factories in the areas of food processing, electric vehicle components and electronics, said the source. Bloomberg