India's Finance Minister Palaniappan Chidambaram
STR  /  AFP - Getty Images
India's Finance Minister Palaniappan Chidambaram, center, speaks Sunday with World Economic Forum Chairman Klaus Schwab, left, and Hero Honda managing director Sunil Kant Munjal at the 20th India Economic Summit in New Delhi.
updated 12/5/2004 6:03:10 PM ET 2004-12-05T23:03:10

Days after the Indian stock market hit an all-time high, India’s finance minister wooed foreign investors on Sunday, promising more reforms and claiming that the country’s economy — one of the world’s fastest growing — offered unprecedented opportunities.

“For the first time, there is a universal acceptance that India now rides the crest of a wave, a wave of reforms and growth,” Finance Minister P. Chidambaram told the India Economic Summit, a gathering of business executives and policy makers from around the world.

“India today is an opportunity. There is an opportunity for every one of you,” he said.

Chidambaram announced the formation of an Investment Commission to facilitate foreign investment and said a roadmap on allowing a bigger foreign stake in Indian banks would be ready by the end of the month.

He said a growing consensus among political parties and the Indian people over economic reforms has helped the economy reach a stage where it can sustain high growth, averaging 7 percent annually, over the next decade.

The three-day summit, which began Sunday, is jointly hosted by the World Economic Forum and the Confederation of Indian Industry.

It comes on the heels of India’s stock market touching an all-time high on Thursday, driven mostly by foreign funds, which are increasingly shifting capital into India from other emerging economies. So far this year, foreign funds have poured a record $7 billion into Indian stocks and bonds. Long-term foreign investment has grown as well.

India’s central bank expects growth of between 6 percent and 6.5 percent this year, down from a 15-year high of 8.2 percent in 2003. Rising inflation, higher oil prices and insufficient rainfall in some parts of the country have contributed to the slowdown.

Still, India remains among the world’s fastest-growing economies.

‘Priority destination’
Manufacturers have boosted their competitiveness as a result of years of efforts to cut costs and enhance productivity. Earnings growth at top companies has averaged more than 20 percent in the past two years and software companies have thrived.

India “has become a priority destination for partnership and investment,” said Colette Mathur, a director of the Switzerland-based World Economic Forum.

About 700 participants from 33 countries are attending the summit, and Mathur said many companies have sent senior executives.

“This year, we are going to have a lot of people who are decision-makers, who have the power to decide for their companies. This is different from what we have seen in the past,” she said.

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