Before the United States Senate passes the legislation on the Indo-US nuclear deal, the buzz of the billions is already creating a major hype in New Delhi.
According to Dr Ashwini Kumar, Union Minister of State for Industries, "Many private Indian and American companies, who have big investments in nuclear technology, will become partners in India."
Talking to rediff.com, he said, "By 2030, India wants to add 25,000 to 30,000 megawatts of nuclear power. I can tell you that the companies which are keeping an eye on this nuclear deal have already started drawing up their plans of how to enter the nuclear energy sector in India."
"What will eventually constitute billions of dollars of investment will help start a new era," he said.
"Reliance Industries, Larsen and Toubro, and Bharat Heavy Electricals Limited, from Indian side, and General Electricals, and Westinghouse from the US, Mitsubishi from Japan, and Areva from France are some of the giants which are already planning big things in India."
The minister said that India is gradually changing laws to permit private investment in the nuclear energy sector, and slowly private companies will chip in.
He dismissed the charge that some Indian states have expressed opposition to the allotment of land for nuclear power plants, citing some 'risks.'
"Once the institutional, regulatory, commercial and legal frameworks for the tie-ups are in place, Indian states will be vying for nuclear energy and investment in the sector," he said.
When asked if any delay in passing of the nuclear deal in the Senate and the signing of the Sector 123 Agreement will affect other bilateral economic issues, he said, "I think the nuclear deal will certainly have a quantum, in-depth and far-reaching impact on bilateral economic relations. And other issues will not be kept hold."
He said that the Indo-US relations will change now in substance too because India is not merely a country of call centres and 'back-up offices' any more.
In July 2006 India has recorded 12.4 per cent growth in industrial production which is bigger than any growth in recorded its industrial history. The big rise in manufacturing activity has helped create 1.6 million additional jobs, he claimed.
Although manufacturing forms only 17 per cent of India's GDP, it contributes about 53 per cent of exports and receives more than two-thirds of the total foreign investment inflows.
A full-fledged manufacturing facility in India can be set up at about 60-80 per cent of the cost in a developed market.
He said that the US continuous to be the largest investor in India. But now, for a change, Indians too are investing heavily in the US. Bharat Forge, Essar, Wipro and other Indian companies' recent acquisitions in the US show that it is becoming the two-way street.
For every dollar spent on business services that move offshore, US companies save 58 cents, mainly in wages. Many Indian offshore service providers are in fact US companies that repatriate earnings.
Studies have found that those Americans who lost jobs to India due to the outsourcing boom have found it easy to relocate themselves in more paying areas like education and healthcare in the US.
The benefits of the Indo-US economic engagement are self-evident, Kumar added.
When asked about US-based unions' opposition to medical services jobs shifting to India, he said: "This is the dynamics of the politics of America. I won't comment on what their labour unions think. But the fact remains that if the $3-trillion US health industry saves even just 10 per cent -- amounting to $30 billion -- it can invest in other social sectors. Medical tourism in India is destined to flourish."
Kumar will represent India at the 3rd Annual India Investment Forum at New York on September 25 and 26 organised by Euromoney and Institutional Investor. The conference focusses on the Indian economy, its direction and future prospects.
Kumar told rediff.com, "It is estimated that an investment of $150 billion is required to be invested for development of the infrastructure sectors like roads, ports, energy and railways."
He thinks that the annual event will help attract "multi-billion-dollar investments in the Indian economy, pursuant to the Indo-US civil nuclear energy deal."
