State-run Export-Import Bank of India (Exim Bank) will fund Indian firms to acquire plantation estates in African and South American countries, a top official said here Monday.
"As these countries allow ownership to overseas investors, we will fund acquisition of farmlands, especially plantation estates by credit-worthy investors and financially-strong plantation firms," Exim Bank chairman and managing director T.C. Venkat Subramanian told IANS on the margins of a planters' conference.
Countries like Mozambique and Madagascar in Africa and Argentina in South America have opened up for overseas investments in the farm sector for growing cash crops, including plantation commodities like coffee, tea and spices.
"China has already made inroads in these countries, with a number of Chinese firms and investors buying large tracts of farm lands for growing a variety of crops for local and overseas markets. Indian planters should explore such opportunities, as the sector has come out of a prolonged cyclical downturn till last year," Subramanian said.
R. Viswanathan, India's ambassador to Argentina, Paraguay and Uruguay, had declared in Chennai recently that Indian missions would assist prospective investors explore buying of farmlands or plantations in South America.
"As a premier export finance institution, we will process investment proposals and estimate the fund required and the risk element involved for us as well as prospective investors," Subramanian said.
Addressing the 116th annual conference of the United Planters' Association of Southern India (UPASI), he said proximity to Africa and favourable soil, climate and lower labour costs would make investments in the farm or plantation sector rewarding in the long-term.
"Though Latin America is far away, access to developed markets in North America and Europe across the Atlantic make investments in these countries a value proposition," Subramanian told about 600 planters of coffee, tea, rubber and spices, who have gathered here for the two-day annual conference.
Set up in 1982 under the Export-Import Bank of India Act 1981, the Exim Bank integrates the country's foreign trade and investment with the overall economic growth.
The Mumbai-based bank also plays a key role in the promotion of cross-border trade and investment.