The infrastructure sector – largely comprising power, roads and highways, urban built-up infrastructure, townships and construction development activities – is an integral factor in the rapid growth of India’s economy. The country has witnessed high volumes of merger and acquisition activity in the infrastructure sector in the recent past due to various government initiatives and liberalization of policies specifically aimed at attracting foreign investors.
Data released by the Department of Industrial Policy and Promotion show that from 1 April-31 December 2017 India received US$2.92 billion of foreign direct investment (FDI) towards construction development and infrastructure activities. The government has also stepped up its efforts to boost the infrastructure sector, by introducing the ambitious Bharatmala roadway and Sagarmala seaway projects, and has allocated approximately US$92.22 billion as a part of its budget 2018-19 towards development of the infrastructure sector.
The power sector is one of the key contributors to India’s long-term and sustained economic growth. Through various policy initiatives, India has attracted significant interest among foreign investors in the renewable energy sector. India is now considered the second-most attractive country, after China, for investment in renewable energy.
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Rupinder Malik is a partner and Revathy Muralidharan is a principal associate in the Gurugram office of J. Sagar Associates. Views are personal.
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