Modi's Make in India may get $6 billion boost

South Korean conglomerate Lotte Group and French automotive group Peugeot SA have discussed proposals to invest as much as $6 billion combined in India, a move that would boost Prime Minister Narendra Modi’s attempts to attract foreign capital in Asia’s third-largest economy, according to reports.

Lotte may invest between $3 billion and $5 billion in the next five years, with the South Korean firm intending to invest in retail, chemicals, food processing and real estate, as well as develop railway platforms in the country. Separately, PSA Group, the maker of Peugeot and Citroen cars, plans to spend about 1 billion euros ($1.2 billion) to build a car factory and an engine plant in southern India.

Modi’s flagship "Make in India" plan encourages foreign firms to manufacture locally by offering easier land acquisition, pruning the number of approvals and, in some cases, offering incentives. The efforts have helped India move up in the World Bank’s ease of doing business survey and achieve an unexpected credit rating upgrade last week by Moody’s Investors Services.

Lotte plans to develop urban real estate by adopting railway stations and maintaining them. In return, the railways will allow the South Korean firm to operate restaurants, hotels and shops. The confectionery arm of Lotte is in the process of setting up a new factory in India, according to the reports. Lotte in a statement said that exploring various business opportunities in India and other countries, but there is nothing confirmed or discussed in detail as to which areas to enter and how much money to invest.

The Indian government is discussing more than 550 foreign investment proposals worth about $85 billion, offering competitive terms to companies and ensuring uninterrupted supply of power and water to plants. The proposed projects include setting up factories in the areas of food processing, electric vehicle components and electronics among others.