At Vibrant Gujarat, Investors Praise PM Modi Reforms Including Notes Ban

Gandhinagar: Business leaders from around the world attending the four-day investment summit in the Gujarat this week cheered Prime Minister Narendra Modi's reforms, and said the disruption caused by his radical demonetisation move should be temporary.

"We are making a real bet on the country. What we are seeing with Prime Minister Modi is really some substantive change, it's more than lip service," said Peter Huntsman, Chief Executive of U.S. chemical maker Huntsman Corp.

Executives at the week-long, biennial Vibrant Gujarat Summit held in the PM's home state said the tide was turning on investments into India, although some complained the approval process is still prohibitively slow.

Huntsman said his company, which sells products ranging from adhesives to industrial inputs, is doing "preliminary analysis on what may end up being several hundred million dollars worth of investments in India."

As someone who first came to India in the late 1980s and has seen the promises made over decades, he described the pace of change under PM Modi as "near light-speed", and said that an overhaul of India's unwieldy tax code as planned with the national Goods and Services Tax or GST would be a game changer.

The PM on November 8 abolished old 500 and 1,000-rupee notes in a bid to root out corruption and force the nation away from its cash habit to digital transactions.

The World Bank said in its report this week that the move would slow India's economic growth to 7 percent this fiscal year, down from an earlier estimate of 7.6 percent.

Other economists have also pared growth forecasts, as money shortages over the last two months have caused frustration for millions of people in an economy largely driven by cash.

Industrialists like B. K. Goenka, chairman of Indian conglomerate Welspun Group, believe the economic hit from so-called demonetisation is in the past.

"Demonetisation is over. It was a bold decision and in the long run it will benefit. It will also help the implementation of GST," said Goenka, adding moves to cleanse the system prior to implementing GST later this year made sense.

Welspun outlined proposed investments of Rs 4,000 crore ($588 million) in Gujarat during the summit, which ended Friday.

Canadian billionaire investor Prem Watsa said his India-focused investment vehicle Fairfax India is raising a further $500 million, as its initial $1 billion raise from 2015 has already been largely earmarked for deployment.

"I'm saying India is the single best country to invest in worldwide for the long-term," said Watsa, adding that all the companies Fairfax India has invested in so far are registering double digit growth rates. "I see huge opportunities."

Even for optimists, though, challenges remain.

Fairfax India warned last week that a $323 million deal it had struck in March 2016 to acquire a 33 percent stake in the Bengaluru airport was still in limbo, awaiting some government and regulatory approvals. That deal had initially been expected to close in mid-2016.

The head of Dubai's DP World, which operates several ports along India's coastline, said he was "very bullish" on India but that more work was needed to speed up approvals.

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