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Thailand’s energy-related companies seeking to diversify their portfolios can take advantage of various incentives India is set to offer to promote investments in the northeastern part of the country, a senior Indian government official says.

“The region is abundant with natural resources and if companies want to invest they can make the region the powerhouse for India,” said Mani Shankar Aiyar, the cabinet minister in charge of developing the Northeast.

“If you take one state alone, Arunachal Pradesh, the potential to use the water systems there to generate electricity would yield about 60,000 megawatts (MW),” he said. That 60,000 MW may involve some environmental issues, but if normal hydropower were constructed, one site could generate about 49,000 MW.

The region, home to some of India’s largest rainforests and largest waterways, could generate close to 60,000 MW in total, including the 30,000 from Arunachal Pradesh.

Aiyar: Power, food, rubber potential areas

He says that demand for electricity in the eight states – Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim – is less than 1,000 MW, although the region already generates close to 2,000 MW.

“Plans are that over the next three years the generation capacity will rise to 5,000 MW, but then there’s huge potential that still can be tapped,” said Mr Aiyar, who was on a trip to Thailand to drum up support for various investments in the highly literate – but sparsely populated – areas of northeastern India.

India, which has been facing shortages of electricity, is looking for investments to help respond to rapidly rising electricity demand as the country continues to record gross domestic product growth of more than 7% annually.

Under Indian rules, 100% foreign direct investment (FDI) in hydro, coal or gas-based electricity is allowed. The rules do not have any restrictions on cost.

Apart from this the region is also rich in other natural resources, such as coal and gas. The government has been looking at establishing thermal power plants in the region as well.

With proven and probable coal reserves of close to 327.26 million tonnes, and 1.14 billion tonnes of proven crude oil reserves along with close to 156 billion cubic metres of natural gas reserves, Thai companies could tap this market.

“Companies using natural gas as a feedstock can set up plants there,” said S.K. Bangur, the president of the Indian Chamber of Commerce.

“Upstream or downstream petrochemical companies, gas separation plants and other big-ticket investments in oil and natural gas all offer great opportunities for companies,” Mr Aiyar said.

India also offers 100% FDI in exploration and refining of crude oil and natural gas.

Another area of interest to Thai investors could be food, due to the similarities between the two countries.

Among other areas that Thai investors could look into is rubber plantations and processing. Thailand, the world’s largest rubber producer and exporter, has expertise in this field. With the growing demand for the product in the energy-hungry Indian market, businessmen in this area could benefit.

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