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NEW DELHI, Sept. 30

POOR inflow of foreign direct investment (FDI) is a part of the larger problem of low investments in the country as a whole and should not be viewed in isolation. This was the view expressed by various speakers at a seminar on `Foreign direct investment — Is India serious' organised by the Indo-American Chamber of Commerce here on Monday.

Speaking at the seminar, the former Finance Minister, Mr P. Chidambaram, highlighted four risks as perceived by foreign investors, while Mr P.N. Vijay, Convener of the Economic Cell of the Bhartiya Janata Party (BJP), pointed out the various bottlenecks that exist in the country that need attention for attracting higher levels of investments.

According to Mr Chidambaram, foreign investors who take interest in investing in the country face four risk perceptions. First, according to him, is the political risk, which, he said, has increased during the past three to four years. Second is the commercial risk, which is a part of a global phenomenon. The third deals with the risk of changing policies. "The road map for policy changes for the medium term should be clear to the investor, as that will help him workout his future decisions," he said. "Another risk has cropped up recently and that is the regulatory risk," he added.

"If the quality of the regulatory bodies are poor then serious problems are ahead in those sectors where Government has been replaced by a regulator," he said.

But according to Mr Vijay, the biggest problem in attracting FDI is the problem of mindset and the historical concept that FDI must piggyback on technology. Also, he said, many foreign investors who get interested to invest in the country finally get fed up with the bureaucracy and red-tapism prevalent in the system and even if they cross these hurdles they face infrastructural problems.

Last, but not the least, according to Mr Vijay, is the hostility of local business towards foreign businesses. According to him, despite all the difficulties, FDI is coming in and the Government is fully conscious of the difficulties which will be sorted out.

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