Roads are a high-risk area, according to Keishi Fujii, vice chairman of the standing committee of Japan-India Business Co-operation Committee. There is no assurance, he says, that income will justify investment: many vehicles will use existing roads and avoid toll highways. The fear is legitimate. Investment in roads will be feasible, Fujii adds, only if the government assures a fixed return to the investor irrespective of the traffic. That is how the colonial administration promoted railways. But neither the Centre nor the states will be brave enough to do that for fear of being described as "pandering to foreign interests".

So FDI in roads is out. Fujii is also critical of India's "time consuming" internationalcompetitive bidding procedure which, according to him, sometimes ends up with "notional equity at the expense of technical superiority". He wants India to opt for "showcase" award of contracts through the Japanese government; India would still get competitive pricing, and Japanese aid, he assures. But this could be messy, open to questioning by Japan's competitors.

A permissive foreign investment policy will not automatically trigger an FDI flood. FDI has a price which the country may not be willing to pay. Attention needs to be focussed on maximising domestic public and private investment in priority areas and allowing in FDI on the terms applicable to domestic investors. India must learn to fully invest its savings and ferret out the best available technology. FDI will then crowd in.