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Shri Kamal Nath, Union Minister of Commerce & Industry, today made a strong pitch for India as an investment destination to a large international audience at the World Economic Forum (WEF) Session on “India – Bigger, Better Business Horizons” in Davos. He said the question for CEOs the world over was no longer “should my company go to India”?, but rather “can my company afford not to be in India?”. On the tourism front, it is Incredible India, but on the economic front, it is clearly Opportunity India, Shri Kamal Nath said.
Citing India’s comparative advantages, Shri Kamal Nath pointed out that India had registered the fastest growth among all major democracies in the world at an average of 7%, representing the fourth largest economy in terms of purchasing power parity (PPP) and the tenth largest industrial economy in terms of sheer size. He spoke of the demographic, consumption and the knowledge dividends of investing in India, because of its largest pool of skilled and technical manpower; a huge middle income group representing a pool of 500 million consumers even at a conservative 45% of the population; and its position as a service capital with Business Processing Outsourcing (BPO) and Back Office Operations estimated at over US $ 30 billion a year and growing at the rate of 25 to 30% per annum. It was not just IT but also the pharmaceutical sector, tourism and health services and educational and other services, he said.
The Minister said that there was a broad political consensus on the reform process, reflected in the existing in foreign direct investment (FDI) policy which was very liberal with Most sectors on automatic route, recent modification in Press Note 18 and increased privatisation in the port and civil aviation sectors.
He emphasised in particular the policy measures taken by India to attract FDI in the Special Economic Zones (SEZs), which included 100% FDI in manufacturing sector through automatic route barring a few sectors for establishment of units in Zones; 100% foreign investment to develop townships within the SEZs; setting up off-shore banking units in SEZs; external commercial borrowings by SEZ units up to US $ 500 million in a year without any maturity restriction through recognised banking channels; flexibility to keep 100% of export proceeds in EEFC account etc. He said that the legislation on SEZs to be brought up before Parliament shortly was aimed at attracting private investment for the development of Zones so that units set up there could avail themselves of world-class infrastructure, communication and banking facilities coupled with an attractive and stable fiscal regime, with minimum regulatory restrictions.
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