GMR’s ouster from the US$511 million airport modernization project in Maldives has refocused the spotlight on political risks facing foreign investments. As the GMR-Maldives story unfolds, this is a good time for Indian investors to think about how to manage political and regulatory risks in transnational investment projects.

For Indian investors, adept at navigating bureaucratic hurdles, interaction with foreign investors and governments is generally smooth. Recently, however, roadblocks in Essar’s US$750 million investment in Zimbabwe and Jindal’s US$2.1 billion project in Bolivia have highlighted the challenges of investing abroad.

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