India has all qualities to protect foreign investment: Chidambaram

Finance Minister P Chidambaram on Wednesday said India has all the qualities to guarantee that foreign investment is protected.

Chidambaram, on the second leg of his North American tour to woo investors, was addressing students and faculty of Harvard University on 'The Rise of the East Implications for the Global Economy'.

The finance minister arrived in Boston after two days in Canada to project India as a viable investment destination.

He said foreign investors should be assured by emerging economies that their capital will be protected and not affected by "whims" of governments.

"Emerging markets have to increase the comfort level of international investors, to improve their sense that their capital is well protected," Chidambaram said. "After all, why would they invest over the long term if their capital can be expropriated by a change in laws or by the whims of the government."

"The best guarantor of investment protection is a stable and democratic political structure, a belief in the rule of law, and a transparent and independent legal system. India has all three," Chidambaram said.

"We constantly hear of moves in industrial countries to engage in financial protectionism, to keep savings at home in order to finance overextended industrial country governments. Any move in this direction would be terribly misguided," the Finance Minister said.

Chidambaram also underscored the need for new multilateral institutions given that economic power centres shift to the emerging markets.

"Global multilateral organisations were set up to deal with a set of problems based on an agenda and a framework set by the industrial countries," he said.