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India: Still the Best Bet for Investments
According to the data provided by Department of Industrial Policy and Promotion (DIPP), the petroleum and natural gas industry in India has attracted Foreign Direct Investment (FDI) worth USD 3,338.75 million from April 2000 to March 2012, which indicates that the Indian energy sector is expected to become at par with the global stipulations, in fact, has already become competitive enough as far as the international investments are concerned. Rabindranath Burman, Managing Director, ITT Corporation India Pvt Ltd writes.

Being a growing economy, India is significant consumer of oil and natural gas. The country is Asia s third-largest oil consumer and world s fifth largest energy consumer. Almost two-thirds of the country s energy consumption accounts for oil and coal, while majority lies in hydrocarbons.

The Indian economy promises to become one of the most dynamic economies in the world with a policy shift towards economic liberalisation, globalisation and promotion of international competitiveness.

Indian Petroleum sector is gearing itself to meet the ever-growing urbanisation and large scale investments in modernising the rural vast land. While pursuing the large infrastructure requirement of the country, the challenge that the oil and gas have already met is to produce one of the best products by investing heavily on getting the best octane value, removing unwanted sulphur and meeting the latest Euro norms. India continues to look out for various gas basins not only on the huge coastal and on shore prospects within India but also bidding and acquiring blocks globally either directly or through joint ventures.

To meet these huge demands, pursuing the best in the globe, there would be huge and sustained investments with world-class product standards and efficiency, for which large and sustained investments would be required in upstream, downstream and infrastructure developments. Going forward from the downstream, various global companies have not only declared what also considering huge investments to the chemical segments as well, which again is maturing from a base refined or processed stage to a mechanised and upgraded quality standard. This calls for one of the best process requirement and proven equipments that would be required.

According to the data provided by Department of Industrial Policy and Promotion (DIPP), The petroleum and natural gas industry in India has attracted Foreign Direct Investment (FDI) worth USD 3,338.75 million from April 2000 to March 2012, which indicates that the Indian energy sector is expected to become at par with the global stipulations, in fact, has already become competitive enough as far as the international investments are concerned.

Most of the developed countries are overhauling their ageing fossil fuel energy and at the same time responding to new challenges including energy security and climate change, India still being a developing country and moderate climatic conditions overcomes this fact. Apart from the mineral richness there are other factors also that lure investors to India. Investor appetite for companies that use resources efficiently is being driven by rising middle-class consumption and higher fossil-fuel costs.

Being the sixth largest consumer of oil in the world and the ninth largest crude oil importer, India s oil and gas sector contributes over 15 per cent to the Gross Domestic Product (GDP). India is looking outwards, and is all set to grow. The genesis of the policy choices is going to be one of the key elements to maintain a fine and indispensable balance between financial integration and increased vulnerability to global demand and supply, making the present decade, a crucial one for the nation to navigate in the oil and gas sector.

Indian government is taking conscious steps to boost investment in the oil and gas sector. A 100 per cent FDI is allowed for Indian companies in refineries, for petroleum products and pipeline sector, natural gas and for infrastructure related to petroleum products marketing. Various measures are also being taken to substantially accelerate exploratory activities for enhancing domestic oil and gas production.

These are improving the recovery factor from existing major fields by implementing Enhanced Oil Recovery (EOR)/Improved Oil Recovery (IOR) schemes, in particular, exploring new areas, especially in deep waters and difficult frontier areas. Also, to promote investments, there are Investment Promotion Cells being set up for the energy sector, to provide a single point of contact for investors, which is a garnering initiative in its own. All this indicates our country s potential for investments in the energy sector.

Even the auto industry majors in the globe have decided India to be a destination to cater to the Asian and Europe, Mediterranean and Asia (EMA) regions.

There are new oil and gas basins being discovered and 78 per cent of the country s sedimentary area is yet to be explored. This exploration will create high demand for various services and operations like drilling rigs, offshore support vehicles, construction and equipment services, collecting stations, transportation etc, which again calls for huge investments. So, oil and gas sector has a very strong integration with the country s growing economy and India being an energy rich country invites the best bet from the foreign nationals to invest here.

In addition to the aforesaid, natural mineral reserves, in terms of one of the best iron ore and the highest yield, makes India a consistent investment region for gearing up to the iron and steel markets globally. Ease of doing business coupled with the democratic government and our universally communicating - English speaking mass, makes it a global destination. In fact, in today's scenario most of the global EPC contractors and process licensors have not only imported young Indian talent but also set up large basis in the country to cater to worldwide engineering projects, be it at the feed stage or at project execution stage.

The huge talent pool is an advantage both at a resource scale as well as considering the economic viability. The country is rising as a potential refining hub because the capital costs are lowered by 25??50 per cent here as compared comparison to other Asian countries.

India is one of the world's fastest growing wealth creators and is emerging as one of the most attractive investment destinations in the world. We have made a considerable progress in the last ten years in attracting private investment into various sectors here. The industrial processes in the country offer a huge potential for up gradation in terms of the innovative technological advances.

The usage of world-class machines, enhanced design and technological capabilities, intelligent manufacturing, asset utilisation, qualitative understanding, makes India stand distinct. With productivity driven thoughtfulness, global management practices of the workforce, and of course, FDI in the midstream and downstream sector, India makes a lucrative choice for the investors.