Insuring Investments Abroad

Insuring Investments Abroad Nachiketa THE government is reported to be giving final touches to a scheme for insuring Indian investments in foreign countries in the form of joint ventures. Such an investment insurance scheme would mainly underwrite various types of political risks that investors abroad have to bear. This is expected to encourage Indian industrialists to promote joint ventures, especially in the developing countries. The government's insistence on Indian capital participation exclusively in the form of plant and equipment produced in the country serves the purpose of encouraging exports of capital goods and creating a potential demand for Indian components, parts and raw materials from these joint ventures, The country has gained sufficient expertise and possesses a fair amount of knowhow in respect of a number of industries that are suitable to be started in many developing countries. The main factors that inhibit the flow of investment to these countries are political uncertainty, unstable exchange rates, risks of nationalisation or appropriation without adequate compensation and dangers of internal strife or war.