Suresh Prabhu, The Union Minister of Commerce & Industry and Civil Aviation, recently visited Australia for the 15th India-Australia Joint Ministerial Commission
During his two day visit the Commerce and Industry Minister Suresh Prabhu invited Australian super funds or Pension funds to invest in India.
The Commerce Minister addressed representatives of about 25 Australian Superfunds and briefed them about the steps being taken by Indian Government to attract investments and spoke about the opportunities in India.
The Union Minister said in a statement, "the high growth of the Indian economy has largely been driven by the private sector and invited the Australian Superfunds to invest in India,"
"Investment opportunities in various infrastructure projects such as industrial corridors, ports, smart cities, airports and railway projects were highlighted by him," added in the statement .
The Union Minister identified Invest-India and Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) as two of the projects where Australian Superfunds could invest.
Australia's superannuation funds are valued at 2.6 trillion Australian dollars (USD 1.93 trillion) as of December 2017. They are among the world's largest with respect to volume.
Australia's pension fund or superfunds does not have much exposure to Indian markets as they have with other international markets.
In the year of 2016, IRB Infrastructure Developers chairman and managing director Virendra Mhaiskar visited Australia to market a new fund – the IRB InvIT Fund. He pitched Australian super fund managers to put money into a new toll road investment trust in India.
Earlier this year in London Mr. Modi and Mr. Turnbull put forward the investment idea during a formal meeting. Both the leaders also discussed the idea of encouraging Australian superannuation funds to invest in Indian infrastructure to add to a $2 billion fund set up by Macquarie with the State Bank of India in 2009.
Source: screen shot youtube
Source: Narendra Modi Twitter
Investment in Indian infrastructure projects is a good investment
Melbourne based financial planner Brijen Joshi commented on this topic and said, " There is no risk in investing in India because it's about investing in infrastructure. Superannuation industry is structured to give maximum returns and the invest in all over the world, its only in India they have limited exposure because India is considered as a high-risk market. But If the Indian Government is inviting for investment in infrastructure, it is a good opportunity for the Indian economy and Australian Superannuation industry."
Talking about benefit to invest in Indian infrastructure development projects Mr. Joshi shared, " If you compare the benefit with the other countries of the world, say for example currently most of the superannuation fund invest in US and other major developed countries, but they have reached to the maximum point and there is no more investment opportunity except the stock market, while India is the fastest growing economy and there are a lot of opportunities especially with the infrastructure. "
"Infrastructure investment is a good investment where generally returns are great, and it has low risk. If you are investing in infrastructure, you are definitely going to get returns on it; it's not like a stock market... so I think because India needs a lot of infrastructures that is the best are to look into and if Australian Super industry invest in that, there will definitely a good sign of benefit." He further added.
Mr Joshi also warned that This idea could be dangerous for self-managed superannuation.
