Asia's third-largest economy has kicked off an international roadshow in Singapore for a masala bond sale aimed at upgrading the country's highways.
The National Highways Authority of India (NHAI) is looking to sell 50 billion rupees ($775 million) worth of the offshore rupee-denominated bond in order to build expressways, economic corridors, bridges and tunnels.
With stops to come in Hong Kong and London, the roadshow is a visible sign of Prime Minister Narendra Modi's commitment to the upgrade of public works, which is seen as critical to future economic growth.
India is looking to reduce traffic congestion by building multi-lane roads and increasing the rate of national highway construction, the country's Minister for Road Transport, Highways and Shipping Nitin Gadkari said at a Nomura event on Monday. Enhancing the monetization of existing infrastructure to fund maintenance and the development of multi-modal hubs were also key goals, he added.
New Delhi has already facilitated investments to fund these programs— the government will be injecting $3 billion of annual equity commitments into the newly-formed National Investment and Infrastructure Fund — but Modi wants the private sector to help.
To drum up foreign investor interest in India's road network, the second-largest in the world, policymakers have undertaken a slew of reforms, Gadkari said. Measures include a one-time fund infusion to revive stuck projects, a fast-track dispute resolution and a new model of public-private partnerships that offers lower risk for the private sector.
Innovative technologies, such as electronic toll collection and intelligent transportation systems, are also underway.
Previously, confidence in the system was lacking and that impacted decision-making, Gadkari said. "Now, there is a stronger political will. We created confidence in the minds of people so the overall mind-set has changed."
As part of a fiscal incentive package, New Delhi has granted 100 percent tax exemption for five years and duty-free import of specified equipment for highway construction.
A former president of the ruling Bharatiya Janata Party, 59 year-old Gadkari assured his audience that corruption and red-tape, common complaints from Indian businesses, were no longer issues.
"We have zero tolerance against corruption, the system is transparent and each tender is there."
Solid returns awaited long-term investors looking to participate in India's highway story, Gadkari added. Vehicle sales keep increasing and the compound annual growth rate of road freight is expected to grow 15 percent over the next decade, he said.
"Every day we collect tolls so we are ready to give you returns daily, monthly or yearly."