Modi says India Ready With Open Arms to Welcome German Investors
BERLIN: Hailing Germany as among India’s most important partners bilaterally and globally, Prime Minister Narendra Modi on Tuesday said that his government is on the path of making India a global manufacturing hub and a good eco-system already existed in India for manufacturing.
In a hard sell of India’s growth story in Europe’s biggest economy, Mr. Modi said that Germany ranked 7th among foreign investor countries in India. Major sectors attracting Foreign Direct Investment (FDI) inflows from Germany are engineering, chemicals and services. “About 600 Indo-German joint ventures are presently operating in India. They provide employment to around 200,000 people. However, there is tremendous further potential in India-Germany economic collaboration. Our economic partnership is still below its full potential.’’
Addressing Indo-German Business Council in Berlin, Mr. Modi said that India is ready with open arms to welcome German companies. “With a view to help the German companies, we have put in place a Fast Track Mechanism. A number of issues have already been resolved through this mechanism. We are doing it sincerely because we value German participation a lot,’’ he told top business leaders of Germany.
The Prime Minister, on his second visit to Germany in three years, stressed on India’s strengths. He said that India already offers a globally cost competitive manufacturing eco-system; a vast pool of skilled professionals with knowledge and energy; world class engineering education base and strong R&D facilities; rise in GDP and purchasing power creating further growth in the domestic market; one of the most liberal FDI Policy regimes in the world; Government’s focus on easing the business environment further.
“Due to these strengths, as said by UNIDO, India is already the 6th largest manufacturing nation in the world. To make it better, we are working hard on various enablers,’’ he said.
Showcasing his pet ‘Make in India’ initiative, Mr. Modi said that his government was committed to transform India as a major player in the global value chain. “Prime motive is creation of jobs and narrowing the gap between affluent and lower sections of society. Make in India has already created a strong impact,’’ he said.
He said that Germany is already contributing in a big way in the success of Make in India. Key areas for Indo-German collaboration include manufacturing, skill development, railways, cleaning of rivers, renewable energy, education, science and technology.
“In addition, we are also implementing a strategic market entry support Programme, since September 2015. It is called MIIM (Make in India Mittelstand). This is mainly to assist German Mittelstand Companies in entering the Indian Market,’’ Mr. Modi told business leaders.
Talking about global recognition to India’s efforts, Mr. Modi made several forceful points. India remains a bright spot in the subdued economic landscape across the world; India has emerged as the fastest growing major economy the last three years with GDP growth rate of over 7%; India has moved up 32 places in last two years in the Global Competitiveness Index of the World Economic Forum- highest for any country; India also moved up 19 places on the Logistics Performance Index of 2016 of World Bank; India is 3rd among the top 10 FDI destinations listed by UNCTAD;
Citing examples of reducing Government and enhancing Governance, Mr. Modi said that India is moving fast towards becoming a Digital Economy; GST is among the most historic reforms India has ever done- and it is going to be implemented from the next month; in the last two years, India has moved towards a low tax regime both on personal as well as corporate side; India has lowered the corporate tax from 30% to 25 % particularly for new investments and smaller ventures; new laws and institutions for Bankruptcy and Insolvency as well as IPR and Arbitration are now in place; more than 7,000 reforms have been implemented on the front of Ease of doing business; 36 white industries have been taken out from the requirement of environmental clearance; more than 50 items have been taken out of defence list; validity period of industrial licenses has been increased upto 15 years; custom clearance has been made 24X7 at 19 ports and 17 air cargo complexes; incorporating a company along with allotment of DIN, PAN, TAN and the CIN is now just one day affair; power connection is provided within a time frame of 15 days; and India’s ranking is now up by 111 places on ‘Getting Electricity’ parameter of World Bank.
He said that several States in India have also cleared reforms which include 100% implementation of single window system for payments & approvals in 16 states; 100% implementation of e-filing of tax returns in 13 states; automated online building plan approval in 13 states and E-filing system for commercial disputes have been implemented in 11 states.
“India has one of the most liberal FDI Policy regimes in the world. More than 90% of the foreign investment flows are under automatic route. Last week we formally decided to abolish the Foreign Investment Promotion Board which was made in 1990s to examine the FDI proposals. The idea is to expand the engagement of overseas investors in the Indian economy. Due to this approach, Our FDI Outlook has been ranked highly positive by various International Agencies,’’ the Prime Minister said.
He said there has also been tremendous growth in the FDI inflows in the last three years and has now reached to 60 billion US Dollars in 2016-17.
“India is a big country. Hence, nothing is enough when it comes to development. We have many dreams. And the dreams are big. But we have small timelines. And this is your opportunity. These opportunities range from building millions of houses to setting up hundreds of smart cities; modernization of railway networks and stations to setting up of high speed rail corridors; generation of renewable energy to construction of transmission and distribution networks. In addition, there is an ever growing need for National Highways, Bridges, and Mass Urban Transport systems, schools, hospitals and skill training institutes,’’ Mr. Modi told the business leaders.
“Our direction, desire and dreams create tremendous business opportunity. Never before, India was so much ready for business. We are on a take off stage. Moreover, our democratic values and an alert judicial system will ensure the safety of your investments,’’ he said.