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Modi assures Chinese investors of transparent, stable regulatory regime
New Delhi, May 16, 2015
Prime Minister Narendra Modi today invited Chinese companies to invest in India, assuring them that the country's economic environment had changed and that its regulatory regime was much more transparent, responsive and stable now.
"We are taking a long-term and futuristic view on the issues. Lot of efforts have been made and are still underway to improve the ‘ease of doing business’," he said in his keynote address at the India-China Business Forum in Shanghai on the last day of a three-day visit to China.
Mr Modi said he believed that foreign direct investment (FDI) was important and that it would not come in the country without a globally competitive business environment.
"Therefore, we have rationalized a number of issues which were bothering the investors," he said.
Ahead of the meeting, Mr Modi held detailed discussions with the CEOs of major Chinese companies. Several senior Indian officials and CEOs of Indian companies were also present at the forum.
"As you know, China and India are two great and old civilisations of the world. They have provided many lights of knowledge on the entire human society. Today, we together, represent more than one third of the global population. India and China have a common history of 5,000 years and a common boundary of over 3,400 km he pointed out.
He dwelt at length on the cultural and educational links between the two countries over the centuries. "We have a lot in common and we can do a lot together. As we helped each other growing spiritually, we have to help each other growing economically. There are instances of such economic exchanges in the past. It is believed that China gave silk and paper to India. We both have potentials of growth and problems of poverty which we can tackle together. I am personally committed to take the co-operative process forward," he said.
Mr Modi said he had a lot of hope from the relationship that he and Chinese President Xi Jinping are trying to build. He recalled that during Mr Xi's visit to India in September 2014, Chinese investments worth $ 20 billion (Rs 12 lakh crore) were committed.
"We signed 12 agreements covering industrial parks, railways, credit and leasing, with cumulative amount of investments of $ 13 billion," he said.
He said India was very keen to develop the sectors where China was strong and needed its involvement. He said the scope and potential, and the breadth and length of infrastructure and related developments was very huge.
Citing some examples, he said India was planning to build 50 million houses by 2022. In addition, it was going to develop smart cities and mega industrial corridors.
For this purpose, the government had redefined its FDI policy on construction and was also coming up with a regulatory framework for the sector.
He said the government had targeted 175 gigawatts of renewable energy in the next few years. It was also paying attention to transmission and distribution issues.
He said the government was modernizing the country's railways, including signals, engines and stations. It is planning metro rail projects in 50 cities and high speed trains in various corridors.
Mr Modi also spoke about the plans for highways, sea ports, airports, financial services, insurance, pensions and other areas.
He said the government wanted to promote manufacturing in a big way to create jobs for the youth, who form 65 percent of the country's population. He spoke about his "Make in India" campaign and the efforts to encourage innovation, research & developmet and entrepreneurship.
"We have to learn from you about the development of labor-intensive industries, creating conditions for sustainable foreign direct investment, skill development, infrastructure creation and export-led development model," he said.
Mr Modi said there was a historic opportunity in India for Chinese companies, especially in the manufacturing, processing and infrastructure sectors. "We have committed ourselves for creating and improving the business environment. I can assure you that once you decide to be in India, we are confident to make you more and more comfortable," he said.
He said the government was making the taxation system transparent, stable and predictable and that it had removed lot of regressive taxation regimes. "In our very first Budget, we said we will not resort to retrospective taxation," he said.
He said the government was reducing the complicated procedures, making them available at one platform, preferably online. He went on to list the various steps being taken in this regard. He also spelt out the initiatives taken for infrastructure development.
"We know that a lot more has to be done. But we are committed to take this process forward. We are constantly working to improve the business environment further.
"owever, our initial measures have helped in building up an enhanced investor confidence. The sentiments for private investment and inflow of foreign investment are positive. FDI inflows have gone up by 39% during April-2014 and February-2015 against the same period in previous year," he said.
"Our growth rate is above 7%. Most of the international financial institutions including the World Bank, IMF, OECD and others are predicting even faster growth and even better in the coming years. Moody's have recently upgraded the rating of India as positive on account of our concrete steps in various economic fields," he said.
"India-Chinese partnership should and will flourish. I expect very good outcome from this coming together. We have complemented each other in the past. We can complement in the present and future too. As two major economies in Asia, the harmonious partnership between India and China is essential for economic development and political stability of the continent. You are the ‘factory of the world’. Whereas, we are the ‘back office of the world’. You give thrust on production of hardware, while India focuses on software and services.
"Similarly, Indian component manufacturers have been masters in high-quality precision and the Chinese players have mastered the art of mass production. The component design expertise of Indian engineers and low cost mass production by China can cater to the global markets in a better way. This industrial partnership of China and India can bring about greater investment, employment and satisfaction of our people.
"Let us work together in mutual interest and for progress and prosperity of our great countries," he said.
"I would conclude by saying that now India is ready for business. You must be sensing the winds of change in India. I only advise to you to come and feel the same. I assure you of my personal attention for your success," he added.