In less than a week after the cap on Foreign Direct Investment (FDI) was hiked in 13 sectors to boost India's sagging economy, China's economic advisor Shoosan Maa announced that the country will invest $160 billion (around ₹9.49 lakh crore) in various sectors in Andhra Pradesh.
In a bid to improve its bilateral relations with India, China is ready to invest the staggering amount in Andhra Pradesh, according to Shoosan.
Andhra Chief Minister N Kiran Kumar Reddy met Shoosan, economic advisor to Xi Jinping and also the Member of Parliament, in Hyderabad to discuss plans on investment in food processing, small-scale industries, infrastructure and education sectors, among others, reported PTI.
"The Chief Minister invited proposals and asked Shoosan to spell out the areas in which they were interested in investing. Shoosan said he would make efforts for promoting investments and improving relations between the two countries," the CMO release said.
Last month, Prime Minister Manmohan Singh announced an infrastructure investment target of ₹1.15 lakh crore for Public Private Partnership (PPP) in the next six months. Several projects spread across civil aviation, roads, railways, ports and power sectors were introduced.
Among those, a major port in Durgarajapatnam, Andhra Pradesh was approved by the cabinet. Also, among the 50 new small airport locations, Vijayawada, Nellore, Kurnool, Kadapa, Nizamabad, Tirupati, Anantapur & Karimnagar in Andhra Pradesh will be taken up.
"Infrastructure is absolutely critical for our medium term growth prospects and we are monitoring progress in this area on a quarterly basis. Several initiatives are being pursued," he said at the ASSOCHAM annual meeting.
China will also send its 10,000 students to study in Hyderabad for various streams, Shoosan said in the release.
With the proposed investment China might be positioned among the top five investors in India. Currently, China is ranked 31st amongst the FDI countries in India. However, the release did not mention any phase or timeframe in which the Chinese investment will happen.
FDI inflows from China (from April 2000 till February 2013) are ₹1,245.93 crore (i.e. US$ 244.76 million), which represents 0.13 percent of the cumulative inflows received by India. The automobile industry is the top sector that attracted FDI equity inflows from China amounting to 40 percent of its investment.