Foreign investors have been showing optimism in the Narendra Modi government and are likely to support the economy when needed.
Foreign investors have been showing optimism in the Narendra Modi government and are likely to support the economy when needed. One such investment option is the asset management company Schroders that is willing to invest in the Indian infrastructure build-up process. In an interview with the Economic Times, Schroders CEO Michael Dobson shares his take on the Modi governance model, the global market scenario and the asset management industry in general.
Talking about the reforms implemented by the Modi government, Dobson said that it was a positive process that was surely going to take some time and the markets are overflowing with energy. As the investor sentiment improves, the situation will get better, according to him. He thinks that it is going to be an uphill task to generate confidence among the investors but it was going to happen someday.
India: A Lucrative Investment Option
Dobson said that the investors were more inclined towards the Indian market as most other emerging or strong economies are dependent on commodities. The demographic and political advantage that India enjoys also contributes to the interest of foreign investors mulling to expand in emerging markets.
India’s Minimum Alternate Tax (MAT) regime that the Modi government has introduced is burdening the foreign investors who seem to be pulling back to wait for better times. Taxation relaxations are one of the main advantages that foreign investors consider while investing in a country and volatility in markets also has a negative impact. Michael said that unlike the tax policy in other economies, India is going through an unstable face and unless stability is achieved, foreign investment is dicey.
MAT affecting foreign investors
He said that a lot of foreign interest was vested in India and to derive the benefit, Modi government needed to revise the MAT. According to Dobson, Schroders was not into infrastructure at present but the company was looking forward to moving into the field and investing in India. The move was currently in the planning phase. He said that their customers were looking at infrastructure investment in a positive light as that would help generate long-term income.
Talking about the reforms implemented by the Modi government, Dobson said that it was a positive process that was surely going to take some time and the markets are overflowing with energy. As the investor sentiment improves, the situation will get better, according to him. He thinks that it is going to be an uphill task to generate confidence among the investors but it was going to happen someday.
India: A Lucrative Investment Option
Dobson said that the investors were more inclined towards the Indian market as most other emerging or strong economies are dependent on commodities. The demographic and political advantage that India enjoys also contributes to the interest of foreign investors mulling to expand in emerging markets.
India’s Minimum Alternate Tax (MAT) regime that the Modi government has introduced is burdening the foreign investors who seem to be pulling back to wait for better times. Taxation relaxations are one of the main advantages that foreign investors consider while investing in a country and volatility in markets also has a negative impact. Michael said that unlike the tax policy in other economies, India is going through an unstable face and unless stability is achieved, foreign investment is dicey.
MAT affecting foreign investors
He said that a lot of foreign interest was vested in India and to derive the benefit, Modi government needed to revise the MAT. According to Dobson, Schroders was not into infrastructure at present but the company was looking forward to moving into the field and investing in India. The move was currently in the planning phase. He said that their customers were looking at infrastructure investment in a positive light as that would help generate long-term income.
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