NEW DELHI, Mar 2: India, which launched far-reaching reforms of its sheltered economy 20 months ago, will eventually compete with China for foreign investment, Finance Minister Manmohan Singh said, reports Reuter.

Singh told foreign correspondent that the religious riots which battered India's commercial capital of Bombay in December and January had sparked doubts among investor*.

"But I feel confident that in the coming months our system will have the resilience to convince Investors that this was an aberration.' he said.

He said in reply to a question that it was unfair to compare India's 2.3 billton dollar in approved foreign invest-

ment since the reform programme began in July 1991 to the estimated 13 billion dollar that China attracted last year

'In China, the process of liberalisation began as early as 1979. And as far as foreign Investment Is concerned, the big increases that China is getting... only came in the late 1980s." Singh said.

"So there Is always the process of meeting the transition problems, changing the old attitudes. changing the old mindsets, and for that patience is necessary."

"Our programmes got off the ground only in July J991. Therefore, I think It is premature to coniparc our experience with China." Singh said.

Most of the foreign Investment China is attracting comes

from overseas Chinese in southeast Asia, particularly from Taiwan and Hong Kong. Singh said.

"India has an overseas community, but it's not as large. as rich, or as trade-on ented as overseas Chinese are," he said.

India, which calls itself the world's largest democracy, can give investors a more secure legal climate, he said

. "Whatever you may say about the Indian system. in a country like China if a particular person ^id not get a tender. 1 don't think he could go to a court of law to enforce his rights."

Singh was referring to an Indian high court judgment last week which overturned a cellular telephone contract

awarded by the Ministry of Communication* after a losing bidder filed a suit complaining that Iht tender process was unfair.

"I think the world has to accept that India is a functional democracy." Singh said. "1 am convinced that tn the long run. foreign investor* have a far more secure environment here than if (they) were dependent on a powerful dicta tor."

India to talk IMF for fresh loan

Another report says: India will soon begin negotiations with the International Monetary Fund for fresh loans lo support Its precarious balance of payments position, Finance Ministry officials said.