To help consolidate India as a major global power, the Manmohan Singh-led United Progressive Alliance (UPA) government will unveil a new policy to promote Indian companies in international markets.

The new policy will be introduced by the end of this year, government sources said on the sidelines of the second Africa-India Forum Summit.

"We have asked the Department of Industrial Policy & Promotion (DIPP) and the Public Sector Enterprises department to chalk out a basic framework. Countries like Japan and China have an aggressive approach and our investors have been saying there is an urgent need for a policy from the government to help industries set up overseas business," said an official.

The new policy will address the biggest stumbling block of finances. The issue, according to Indian officials in Addis Ababa, found mention during various interactions between the government and the businessmen.

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New Delhi's interest in this promotional policy has come in the wake of China and Japan's aggressive moves in this direction.

Chinese companies, with large presence in the African market, enjoy solid backing of its government.

"Many of them are government agencies, so they do not face any financial crunch. Japan, too, has a very supportive policy in this regard for its companies," said an official.

"For example, someone was ready for a big ticket investment in Africa but he couldn't get a loan because a nationalised bank was not sure about mortgaging a property far away from India," said the official.

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The new initiative is more significant because Prime Minister Manmohan Singh has pushed for India's bigger role in the African continent, seen as a major investment opportunity for our companies.

"We should encourage trade and investment flows as well as transfer of technology. Private sectors should be fully involved in the efforts to integrate our economies," Singh had said at the summit.

Officials say besides Africa, South Asia and West Asia have the potential to draw Indian investors in a big way.

"The local banks in Africa, too, are not able to provide major support to Indian companies, especially mid-sized ones. The banks have their own priorities and, more important, don't have the capacity to back Indian ventures," an official said.

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"The local banks in Africa, too, are not able to provide major support to Indian companies, especially mid-sized ones. The banks have their own priorities and, more important, don't have the capacity to back Indian ventures," an official said.

However, there is no possibility of the government giving a sovereign guarantee to Indian companies for overseas projects.

"That cannot be a solution. It is not feasible in this competitive age," said an official.

The government is also advising Indian companies to find local partners while charting unknown territories.

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"We will encourage Indian entities to search for suitable partners from the local market in terms of human resources. Our embassies have even advised companies coming to Africa that they should have some local people on their boards for joint ventures," said the official.

While the Chinese fly down their technical experts and a large part of the workforce from home for projects in Africa, Indian officials claim they have been suggesting to Indian companies to employ local people as much as possible.

"We find governments feel comfortable if their people get jobs," said the official.