Indian Ambassador to the UAE M K Lokesh says recent developments involving two flagship UAE companies – Etisalat and Taqa – have put at risk all further UAE investment in India.
Speaking in an exclusive interview to Emirates 24|7, Lokesh said the current depreciation of the Indian rupee, drop in the Indian stock markets and downgrading of India’s rating by a credit rating agency will all only contribute to a cooling off in interest of UAE companies in terms of investing in India.
Etisalat has written off $1billion after its Indian partners ended up in a major scandal centred around the allocation of 2G spectrum licences, according to the senior-most Indian diplomat stationed in Abu Dhabi.
“Like other international investors, local investors and officials are concerned about India.
“The telecom licence was given by the Indian government. Later, the court declared that the licence had been obtained through fraudulent means. They [Etisalat] have already written off $1 billion and want to wind up operations in India,” Lokesh said.
The ambassador said the Abu Dhabi National Energy Company (Taqa), another UAE company, is also worried about its Indian operations because the company is not able to recover huge dues from state entities in the southern Indian state of Tamil Nadu for electricity supplied.
Taqa a publicly-listed company on the Abu Dhabi Securities Market (ADX), has been managing the Neyveli power plant in the southern Indian state of Tamil Nadu and the company is owed $100 million by customers, the ambassador said.
“There are some concerns among local authorities in the UAE about some of the recent developments in India. We are trying to resolve these problems,” he said.
“Like other global investors, UAE investors feel that local issues in India should not penalise UAE companies. Not that all of them have committed fraud in India,” he said.
“Definitely, it will hold back UAE investment in India because sentiment will be affected not only here, but all over the world.”
“It is a temporary situation, but investors will move to more attractive countries.
“UAE-India trade is growing, but I have not come across any new factories being set up by Indian investors here. There is also a temporary lull in the flow of investment from India to the UAE real estate market,” he said.