A Department of Industrial Policy and Promotion (DIPP) official has expressed concern over the recent withdrawal of mega projects by ArcelorMittal and Posco, saying it would "hit" investor sentiment and impact FDI flow.
Last week, world's largest
steel maker ArcelorMittal, in the biggest foreign investment pullout, scrapped its $12 billion (Rs 50,000 crore) steel plant in Odisha. South Korean steel major Posco, too, pulled out of Rs 30,000-crore
steel mill in Karnataka. The projects were scrapped mainly due to inordinate delays, problems in acquiring land and securing raw material linkages, among others.
"These moves would hit the sentiments of foreign investors and that too during the time when the country needs more FDI," the official said.
DIPP deals with foreign direct investment (FDI) related matters.
FDI inflows in India have registered a decline of 38 per cent to $22.42 billion in 2012-13, compared to $35.12 billion in 2011-12.
India would require around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.
"Any such withdrawal will dampen
the spirit of foreign investors," Head of Tax and expert on FDI with corporate law firm Amarchand & Mangaldas, Krishan Malhotra, said.
Decline in foreign investments could put pressure on the country's balance of payments and may also impact the value of the rupee.
Rupee declined by about 10 per cent during the lat two months and has touched an all-time high of 61.21 against the US dollar.
With inputs from PTI
PHOTO: Associated Press 
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