Investment Scenario

Between April 2000 and March 2016, the industry attracted US$ 10.48 billion in Foreign Direct Investment (FDI). Some major investments and developments in the Indian power sector are as follows:

  • India Power Corporation, one of the power generation companies in India, plans to expand its thermal power capacity by acquiring stake in Meenakshi Energy from French major Engie which has 89.11 per cent stake in the target company.

  • Sembcorp Industries have launched a 2,640 Mega Watt (MW) SembcorpGayatri power complex worth US$ 3 billion in Nellore, Andhra Pradesh which is the largest Foreign Direct Investment (FDI)–driven project on a single site in the thermal power industry in India.

  • ThyssenKrupp India, the Indian arm of the German engineering conglomerate, plans to make high-grade environment-friendly boilers which use less fuel, for the Indian power sector by collaborating with a foreign company.

  • SunEdison, world’s largest renewable energy company, plans to continue its focus on ‘Make in India’ by further reducing the cost of renewable energy and developing over 15 gigawatts (GW) of wind and solar projects in the country by 2022.

  • Aditya Birla Group has announced a partnership with the Abraaj Group, a leading investor in global growth markets, to build a large-scale renewable energy platform that will develop utility-scale solar power plants in India.

  • Sterlite Grid, India’s largest private operator of transmission systems, is joining hands with US major — Burn & McDonnell for its Rs 3,000 crore (US$ 444.72 million) power transmission project in the Kashmir valley.

  • The Dilip Shanghvi family, founders of Sun Pharma, acquired 23 per cent stake in Suzlon Energy, with a preferential issue of fresh equity for Rs 1,800 crore (US$ 266.83 million).

Government Initiatives

The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. Some initiatives by the Government of India to boost the Indian power sector:

  • Mr Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy outlined Government of India’s goal to provide electricity to every home in India by 2020, while also focussing on ensuring the cost of power is affordable to everyone.

  • Mr Piyush Goyal, Minister of State (Independent Charge) for Power, Coal, New and Renewable Energy, has stated that the Government of India has set a target to electrify all un-electrified villages in the country by the end of 2016.

  • A Joint Indo-US PACE Setter Fund has been established, with a contribution of US$ 4 million from each side to enhance clean energy cooperation.

  • The Union Cabinet has approved amendments to the new power tariff policy under the Electricity Act that aims to improve regulations for setting rates, promote clean energy and ensure uninterrupted supply to all consumers by FY 2021-22.

  • The Government of India has resolved the issues regarding transfer of mining leases and grant of forest clearances to the winning bidders of coal blocks. It expects operations to start in about 10 more mines by March 2016, easing coal availability to the projects attached to these mines.

  • The Government of India plans to set up a trading platform for clean energy, which will be jointly developed by the Ministry of New and Renewable Energy (MNRE) and Power Trading Corporation of India (PTC), to help states buy, sell and trade renewable-based power.

  • The Ministry of Petroleum and Natural Gas is seeking to enhance India's crude oil refining capacity through 2040 by setting up a high-level panel, which will work towards aligning India's energy portfolio with changing trends and transition towards cleaner sources of energy generation.

  • Under the Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY), the Government of India has electrified 258 villages across the country between February 15, 2016 and February 21, 2016 and has decided to electrify remaining 18,452 unelectrified villages by May 01, 2018.

  • The Government of India plans to sell another 5 per cent stake in the country's largest power producer National Thermal Power Corporation (NTPC), at a floor price of Rs 122 (US$ 1.78) per share, which will help the government raise over Rs 5,000 crore (US$ 733.6 million), thereby helping to raise funds as part of the divestment plan.

  • The Government of India plans to auction large sized hydropower projects, similar to the auction of Ultra Mega Power Projects (UMPPs) for thermal power plants of capacity 4,000 megawatt (MW) in Sasan in Madhya Pradesh and Mundra in Gujarat, which have been setup in a cost effective manner.

Sourced from the India Brand Equity Foundation Power Report

6 Reasons Why You Should Invest in India

1. India's GDP is on a roll

India's gross domestic product is reaching new heights every year. India is now the 7th biggest economy in the world.

2. India's FDI is on the rise

India's foreign direct investment has been increasing significantly since the past five years. There are three major countries that are known to be the biggest foreign direct investors in India. Mauritius, Singapore and United States, which bring in more than $15 billion into the country.

3. India is turning into an industrialised economy

India is moving from being an agriculture based economy to an industrialised and service focused economy similar to the US, Europe and other industrialised countries.

4. India's population keeps on growing

In terms of population, India is the second largest country in the world. By 2025, India will be the biggest country in terms of population. Western markets like the European Union and the United States are set to benefit from a 1.15 plus billion population in India.

5. Doing business in India is getting easier

India is among the top 40 nations to have carried out the highest number of business regulation reforms in the last five years, most of these related to introduction of technology to ease business operations.
Nowadays, in just 30 days one can have one's business up and running. Doing business in India is getting easier and investor friendlier year-on-year.

6. India & China: New Economic Gravity by 2050

Andreas De Rosi mentions in his article a research paper of Danny Quah, from the London School of Economics.
Quah wrote that the world's economic centre of gravity is projected by 2050 to locate, literally, between India and China. So doing business in India is a must for companies with a long-term view, as will sooner or later come back to the time when it was the biggest economy in the world.

Sourced from - AJSH & Co