The Indian Government is close to launching an investment vehicle in London to use $5bn (€3.4bn) of the country’s foreign exchange reserves as a contribution towards a $492bn investment plan over the next five years for India’s roads, railways and airports.

The special purpose vehicle, which will be a subsidiary of the Government-owned India Infrastructure Finance Company, has gained UK regulatory approval and is expected to open for business next month, according to S S Kohli, chairman and managing director of IIFC.