The government has ratified a big ticket investment participation by UAE in India’s infrastructure sector. According to reports, the Cabinet has given green signal to the MoU signed between the two countries in February this year.
The UAE investment arrangement is known as UAE- India Infrastructure Investment Fund, was proposed during the visit of the PM to UAE in August 2015. It was proposed for expansion of railways, ports, roads, airports and industrial corridors and parks.
If implemented, UAE will become the second largest investing country in India’s infrastructure sector after Japan.
Main focus of the UAE investment is to add money to the new born National Infrastructure Investment Fund (NIIF). The NIIF arrangement is a special purpose vehicle that was created to mobilize funds for India’s resource crunch infrastructure sector.
NIIF was launched in December 2015 with a funding size of Rs 40000 crores.
India and UAE has signed a Bilateral Investment Protection Agreement last year to facilitate investment flow from the oil rich gulf country to India. According to the government sources, the NIIF funds to be procured from UAE will be utilized to finance green field and brownfield projects as well as stalled projects.