global investors` india forum

Transcription

Investment & Technology Promotion Division
Ministry of External Affairs
Government of India
GLOBAL INVESTORS’
INDIA FORUM
23rd & 24th September, 2015 • New Delhi
Day-1
Inauguration
From Left to Right: Mr. Sunil Kanoria- President Elect of ASSOCHAM; H. E. Mr. Takeshi Yagi, Ambassador of
Japan; Mr. D. S. Rawat, Secretary General of ASSOCHAM; Mr. Shaktikanta Das, Economic Affairs Secretary,
Ministry of Finance; Mr. Rana Kapoor, President of ASSOCHAM; Girish Pillai, Advisor (Infra)., Railway
Board, Ministry of Railways, Government of India; Mr. Ismail Ersahin, World Association of Investment
Agencies, Mr. Sandeep Jajodia, Vice president of ASSOCHAM
Day-2
Inauguration
From Left to Right : Mr. D .S Rawat, Secretary General of ASSOCHAM; Dr. Guann- Jyh Lee, Executive
Director, Economic Division, Taipei Economic and Cultural Centre in India; Mr. Ravindra Sannareddy,
Managing Director and CEO Sri City Pvt. Ltd; Dr. Anup K Pujari, Secretary, Ministry of Micro, Small &
Medium Enterprises ( MSME ); Mr. Mangal Dev, Senior Vice President Rail Systems Company, Hitachi India;
Mr. Ajay Nijhawan, Senior Vice president, Model Economic Township Limited
PROCEEDINGS & RECOMMENDATIONS
THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA
GLOBAL INVESTORS’ INDIA FORUM
23rd and 24th September 2015, Hotel Taj Mahal, New Delhi
Program Highlights at a Glance
• ASSOCHAM would like to thank the following for their active support cooperation
and participation in the Global Investors’ India Forum.
• This two days Global Investors’ India Forum program was organized with support
from Investment and Technology Promotion Division (ITP) the Ministry of External
Affairs, Ministry of Power, Ministry of Micro, Small and Medium Enterprises, and
the Ministry of Road Transport and Highways, Government of India.
• Five State Partners assciated with the event were.
1.Tamil Nadu
2.Odisha
3.Jharkhand
4.Telangana
5.Karnataka
• Leading multilateral Financial Institution Asian Development Bank (ADB)
participated at this year’s Global Investors’ India Forum.
• The World Association of Investment Promotion Agencies (WAIPA), headquartered
in Turkey promoted by United Nations Conference on Trade and Development
(UNCTAD), with presence in more than 130 countries, with 170 Investment
Promotion Agencies supported the Global Investors’ India Forum.
• Business chambers representing Asia Pacific, America, Latin America, Africa, Europe,
UAE actively participated in the deliberation.
• Leading Chinese and Japanese Financial Institutions/Banks Addressed the Forum
included the World’s Leading Banks ICBC (Industrial and Commercial Bank of
China).
GLOBAL INVESTORS’ INDIA FORUM
September 23-24, 2015, New Delhi
A
PROCEEDINGS AND RECOMMENDATIONS
SSOCHAM First Global Investors’ India Forum meet was held over two days, 23rd and 24th of
September, 2015. The event was actively supported by a host of Central Government Ministries/
Departments and State Governments. These included Ministry of External Affairs (Investment &
Technology Promotion Division), Ministry of Micro, Medium & Small Enterprises, Ministry of Power.
In addition various State Governments also participated and actively supported this event which
included Government of Jharkhand, Government of Odisha, Government of Tamilnadu, Government
of Telengana and Government of Karnataka.
In addition the event received support from a number of international agencies such as UNCTAD’s
World Association of Investment Promotion Agencies (WAIPA), Japan International Cooperation
Agency (JICA), and Japan External Trade Organization (JETRO). Besides, 8 international Chambers of
Commerce & Industry, country/regional representatives from ASEAN, Japan, China, UAE, Canada,
Europe, France and Germany participated actively in this event. Leading financial institutions, banks,
private equity, government officials, diplomats, decision makers and the leaders from the Global
Industry participated in this meet. Yes Bank acted as Knowledge Partner along with Economic Times
as Media Partner.
(L to R) Mr. Sunil Kanoria- President Elect of ASSOCHAM; H. E. Mr. Takeshi Yagi, Ambassador of Japan; Mr. D. S. Rawat, Secretary
General of ASSOCHAM; Mr. Shaktikanta Das, Economic Affairs Secretary, Ministry of Finance; Mr. Rana Kapoor, President of ASSOCHAM
Proceedings and Recommendations of Assocham’s Global Investors’ India Forum
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Day 1 : Inaugural Session
Keynote address
The inaugural session was presided over by Shri Shaktikanta Das, Secretary, Department of Economic
Affairs, Ministry of Finance. Speaking on the occasion he said India’s investment activity is showing
signs of revival. Government is deliberating on ways to loosen further sectoral caps for FDI, address
demand revival, boost financial savings through Gold bonds and create robust regulatory framework.
Government is working towards providing a stable and simple taxation regime with greater certainty
and implementing Good and Service Tax (GST) is top priority. He also said that strong steps and
measures are being taken for ‘Make in India’ by improving Ease of Doing Business, dismantling old
procedures and rules and easing infrastructure constraints. Additionally, he mentioned that a new
enabling framework for fostering Start-Ups was being worked out along with demand revival through
structural adjustments measures rather than resorting to fiscal and monetary stimulus.
Additionally, he highlighted the following six initiatives the Government is taking to boost Economic
Sentiment and Spur Industrial Growth in the Country:
1. Augmenting Resource Flow into Banks: Effective steps were being taken to address stressed assets
of the bank along with Governance issues with the help or the “Indradhanush” scheme
2. Deepening Equity and Debt Markets: Government and regulators are working to further develop
the Corporate Debt Market, and to make it attractive to small investors.
Mr. Shaktikanta Das, Economic Affairs Secretary, Ministry of Finance, Government of India
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3. Simplifying Rules related to External Commercial Borrowings (ECBs): Government was in discussions
with the Reserve Bank of India (RBI) to ease some of the rules for external commercial borrowings
(ECB), adding “soon”. To this end, RBI would issue soon a draft paper.
4. Further FDI Reforms: The Government has undertaken a series of reforms in the FDI policy, but still
more is to be done. A Simple & Progressive FDI Policy is being worked, by removing complexities
related to sectoral caps.
5. Boosting Financial Savings: While the Gold Bond and Gold Monetization scheme will channelize
financial savings away from physical asset like gold, the Government is working on more measures
to push up financial savings.
6. Government is committed to providing a simple and stable taxation regime with a high level of
certainty: A number of issues on transfer and advance pricing have been resolved. The Government
is working on introducing GST as soon as possible and the administrative measures are in place.
Shri Rana Kapoor, President, ASSOCHAM, MD and CEO, YES Bank in his inaugural address recalled
some of the significant reform initiatives undertaken by the Government in the backdrop of falling
inflation, shrinking current account deficit as a proportion of GDP and fiscal consolidation. Shri
Rana Kapoor drew attention to some significant policy initiatives undertaken by the government to
strengthen the growth momentum such as:
• Step up in modernization and investment activity in Indian Railways. These include modernization
and up gradation of 400 railway stations, installation of ticket vending machines, procurement of
railway rolling stock and locomotives, speeding up the process of implementation of dedicated
freight corridors.
• Establishing a strong and vibrant brand India through a combination of strategic initiatives such as
Make in India, Skill India, Digital India, Start up and Stand up India.
• Injecting spirit of competitive federalism in India’s federal polity. This has led to improvement in
various parameters impacting ease of doing business across states.
• Issue of licenses to 10 new banks with a view to make banking/financial services more inclusive.
• Use of Jandhan, Aadhar, and Mobile (JAM) trinity in implementing direct transfer of benefits.
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Shri Rana Kapoor, President, ASSOCHAM, Managing Director and CEO, YES Bank
Shri Rana Kapoor suggested formation of an entrepreneurship & innovation incubation program,
with a defined mandate to promote entrepreneurship in India through Funding, Incubation, Vesting,
and Expansion (FIVE) framework.
Shri Sunil Kanoria, President Elect, ASSOCHAM, Vice Chairman, Srei Infrastructure Finance Limited
referred to unfolding and revival of India’s growth story over the last few months which has given a
fillip to the investment sentiment. Some of the important suggestions made by him were:
• Need to turnaround stressed infrastructure assets through new partnership and management
initiatives rather than selling these to Asset Reconstruction Companies (ARCs) at heavy
discounts.
• Use of technology to bring down construction costs and improve operational efficiency.
• Expand the ambit of vocational training/disciplines which are restricted to 400 trades as of now.
• Regulatory institutions need to have representation from all stakeholders. Further, they need to
strike a right balance between regulation and development.
• Use of leasing to create assets in transport, mining, railcars etc.
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Shri Sunil Kanoria, President Elect, ASSOCHAM, Vice Chairman, Srei Infrastructure Finance Limited
Mr. Ismail Ersahin, Executive Director, World Association of Investment Promotion Agencies
(WAIPA) said India has a large population and young demographic profile which is a major plus in
terms of availability of human resources. Government’s liberal policies and reforms undertaken
have set the ball rolling. Red Tape has been cut. Regulatory approvals have been streamlined to
promote Ease of Doing Business; India is an easier place to do business than any other time in the
past. He welcomed the move to bring down the corporate taxes and implementing of Goods &
Services Tax (GST) by 2016. Since the launch of ‘Make in India’, India has seen an increase of 48% in
FDI. It shows much growth but still short of its potential.
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Mr. Ismail Ersahin, World Association of Investment Promotion Agencies (WAIPA)
Shri Girish Pillai, Advisor, Railway Board highlighted the huge investment requirement for the
Railway Infrastructure by quoting Dr. Sam Pitroda Committee Report (2012). According to which
Railways should have Rs8.5 lakh crore of investment in the next five years. He said that Government
was facing challenge to operate passenger trains and freights train on common railway track. This
has resulted in huge congestion on the rail network. He categorized the investment in Railways as
follows.
1. Requirement of US $ 140 Billion over the next 5 years of which 50% of investment will be required
in new networks and enhancing the existing networks.
2. 25% of the budgeted railway expenditure to be invested annually in rolling stock manufacturing
facilities and its procurement.
3. There is huge amount of investment required to be made in passenger amenities and facilities to
improve the customer experience.
4. Substantial investment requirement for railway station development and maintenance.
His Excellency, Mr. Takeshi Yagi, Ambassador, Japan, drew attention to rising FDI from Japan and
Japan’s abiding interest in creation of infrastructure assets. He emphasized the need for:
• Early implementation of GST.
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• Certainty and clarity on taxation issues included permanent establishment taxation and transfer
pricing.
• Easing of infrastructure bottlenecks at ports, highways ensuring seamless transport connectivity.
His Excellency, Mr. Takeshi Yagi, Ambassador, Japan
Shri Sandeep Jajodia, Vice President, ASSOCHAM, Chairman and Managing Director, Monnet Ispat
and Energy Ltd, presented the vote of thanks to all the panelist, dignatories and delegations.
Session I: Red Tape to Red Carpet
This session was presided over by Dr. Saurabh Garg, Joint Secretary (Investments), Department of
Economic Affairs, Ministry of Finance, Government of India who pointed out that 90% of FDI coming
into India, comes through automatic route where no approval is required subject to registration with
RBI. Only 10% of FDI requires approval from regulatory authorities due to the caps in certain sectors
or due to the strategic nature of concerned sectors. Ministry’s constant endeavour is to have a policy
which is simpler to understand and simpler to implement. Even where FDI comes through automatic
route, an attempt from the ministry is to have web -based interactive mode to remove the need for
any personal interaction.
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Dr. Saurabh Garg, Joint Secretary (Investments), Department of Economic Affairs, Ministry of Finance, Government of India
Shri Sanjeev Gupta, Managing Director, Accenture applauded Government in making Brand India
a success story despite challenging times. But there are few issues where Government focus is
required. Infrastructure is area where industry wants to see some initiatives from the Government
like need to streamline process and procedures in taxation. Both domestic and foreign investors
expect simplification and clarity. Also labor reforms need to be pushed from industry perspective
because labor required in service industry is entirely different from that of manufacturing
industry.
Speaking on the theme, Mr. Pan Song, Managing Director of Fosun Group, China acknowledged
that economy of India is doing better than that of China if we look at the GDP growth rate. In his
view India is looking for investment in areas, namely, financial sector including insurance and asset
Management, pharmaceuticals and healthcare, construction including resorts and budget hotels,
real estate.
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Mr. Pan Song, Managing Director, Fosun Group, China
Mr. Kazuharu Kono, Secretary General of Japan Chambers of Commerce and Industry in India
said if India needs more investment Government should reach to small and medium enterprises in
Japan and should take initiatives to make them aware about investment policies and procedures in
India. Japanese companies face risk and difficulty on taxation front. Therefore, Government of India
should have simple and stable regulatory framework. He also said that Japanese companies feel that
there is insufficient infrastructure which is not providing them value and cost benefit in long run.
Government should make the start up process and establishment easier so that new ventures can be
set up easily.
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Mr. Kazuharu Kono, Secretary General of Japan Chambers of Commerce of Industry in India (JCCII)
Shri Getambar Anand, Spokesperson President, CREDAI said that there is clarity of thought
regarding ease of doing business in India and various State Governments have moved forward
to improve the investment climate by offering incentives, easing infrastructure bottlenecks and
holding dialogue with investors. However, at the lower level, businessmen still face obstacles and
challenges in transacting business as many procedures are to be followed. So, he suggested that
Government should take steps to pursue the initiatives such as ‘Make in India’, ‘Digital India’, ‘Ease
of Doing Business’ at the field level.
Session II: Urban Rejuvenation and Transformation
Shri Rahul Sharma, Chairman, Japan India Business Promotion Council highlighted lack of or
inadequate availability of water, sewerage treatment, waste treatment plant, cleaning of air by
technology, recycling/treatment of municipal waste etc. These services need to be provided by the
Government. He suggested Government needs to upgrade its technical specifications while inviting
tenders as per today’s requirement and should consider quality and technical dimensions of the
bid also.
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Speaking on this theme Shri Subrata Mitra, Director, Public and Government Affairs, HUAWEI
Telecommunications India said the challenge before the Government is how to accommodate the
movement of people from rural areas to the congested urban areas. He suggested that Government
should focus on building a digital infrastructure in urban areas; smart cities must have high speed
communication networks, smart traffic management, smart surveillance systems for safety, system
of monitoring pollution level and compliance to environmental standard. He also suggested that
Government should take a holistic perspective on urban utilities such as power, water, drainage, gas.
Shri Sachin Pant, CEO, Innovest Ventures said Government should check the state of utilities and
urban services such as water, sewerage, waste management and transportation on a regular basis.
Management of cities should be undertaken through joint partnership mode involving private investor
and urban development authority.
Mr. Takema Sakamoto, Chief Representative, Japan International Cooperation Agency (JICA) India
said growth brings both opportunities and challenges. Government should take aggressive steps in
infrastructure development, policy and institutional improvement, human resource development. He
suggested that Government should encourage private sector participation wherever possible because
public sector won’t be able to achieve all objectives. He added that urban areas are engine of growth.
In India urban areas account for a 30% of population and 60% share in India’s GDP. To sustain urban
development Government should take care of transportation, water sanitation, waste management,
energy requirements in urban areas.
Mr. Takema Sakamoto, Chief Representative, Japan International Cooperation Agency (JICA) India
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Session III: State Investment Promotion Scheme: Odisha
This session was presided over by Shri Sanjiv Chopra, Principal Secretary, Government of Odisha
who mentioned that many initiatives have been undertaken by the Government of Odisha to
change image and perception among the business community and investors. He drew attention
to the potential of Odisha as it has huge deposits of natural resources such as Coal, Bauxite, and
Manganese etc. He mentioned pacakage of incentives which Government of Odhisa as offered to
investors these inter alia include subsidized cost of land for worker’s hostels, land bank of 75000
acre for industrial use, tax reimbursements for two years, capital subsidy for plant and machinery,
stamp duty exemption.
From Left to Right: Mr. P. Balaji, Director, Regulatory, External Affairs & CSR, Vodafone India; Mr. Harsh Shrivastava,
Sr. Vice President, SREI; Shri Sanjiv Chopra, I.A.S, Principal Secretary, State Government of Odisha,;Dr. Sunil Bhargava,
Principal Resident Commissioner, Odisha; Mr. Rahul Sharma, Chairman, Japan-India Business Promotion Council;
Mr. Harish Ahuja Managing Director, Shahi Exports
Speaking on this theme Shri P Balaji, Director, Regulatory, CSR and External Affairs, Vodafone India
said there is a need for coordination between States and the Central Government and synergy between
public and private sector. He pointed out that there should be continuous supply of power to keep
the network running, industrial rates for power should be affordable, provision of right of way for
fiber optic roll out for expanding the digital base in Odisha. He also pointed towards need for urgent
reforms related to telecom tower policy in the context of having more investment in broadband.
Shri Satish Pai, Deputy Managing Director, Hindalco, Aditya Birla Group drew attention to areas
where Government should focus on:
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• Railways, ports, roads sector because inadequate connectivity is increasing the lead time for
delivery of goods from mines to ports, and adversely impacting transportation cost also eroding
competitive advantage.
• Ease land acquisition to attract FDI.
Shri Rahul Sharma, Chairman, Japan India Business Promotion Council said in Odisha logistics cost
is very high because of poor roads and saturation of rail capacity which makes evacuation of cargo
costly and time consuming.
Shri Rahul Sharma, Chairman, Japan India Business Promotion Council
Session IV: State Investment Promotion Scheme: Jharkhand
This session was presided over by Shri K Ravi Kumar, Director (Industries), Government of
Jharkhand. He referred to significant improvement in ease of doing business in Jharkhand. According
to the report released by the World Bank, Jharkhand ranked 3rd in terms of ease of doing business
amongst the states of India. He highlighted the strength of Jharkhand as it is home to rich natural
resources. On Incentive front he said that, Government of Jharkhand can subscribe upto 26% of
equity in select electronics manufacturing cluster, reimbursement of VAT, subsidy on capital in plant
and machinery, exemption from mandi tax, subsidy upto INR 7 Cr for creation of industrial parks.
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Speaking on theme Shri Rajiv Mishra, Vice President, Samsung India said that earlier Jharkhand
suffered from political instability which deterred investors. With political instability in the State of
Jharkhand the investors perception and sentiment and easily improve. however had political problems
since inception. Investors’ were then hesitant to invest in an environment with political uncertainty.
Land acquisition remains a challenge.
Shri Akhilesh Saurikhia, Team Leader, EY said there has been a change in the mindset of those
involved in administering government policies. Today both Government apparatus and personnel
entrusted with policies are more investor friendly than any time in the past. He suggested that
Government should take initiatives and talk to investors on a regular basis and solicit investors’
opinion about their needs.
Shri Vijay Prakash Shah, Founder and Mentor of South Asia Forum for Energy Efficiency said
Government policies are in place to attract investments and boost economy. Government just needs
to work on creating right kind of public relations to enable investors to understand better what the
Government has to offer in terms of policies and incentives
Shri Jagdish Mitra, Head Strategy, Tech Mahindra said Jharkhand has untapped market. So,
Government needs to open up to the investors. Government should focus on opening more vocational
institution for skill development in IT & ITES industry and create technology investment areas which
allow small entrepreneurs to come and set up software and technology related business.
Shri Sri Srinivasan, MD, Arthur D. Little said Government should position Jharkhand to attract
investors given an environment where states are vying for investment. This calls for hassle free
streamlined procedures and well structured incentives to attract investment.
Shri Sri Srinivasan, Managing Director, Arthur D. Little alongwith other panelists
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B2B Meeting during the GIIF
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Day 2 – Session-I
Make in India - Way Forward
This session was presided over by Dr. Anoop K Pujari, Secretary, Ministry of Micro, Small and Medium
Enterprises (MSME), Government of India highlighted the initiatives taken by the Government to
promote the MSME sectors such as:
• Removal of clause related to prior work experience and amount of turnover in bidding for
Government tenders
• Change in investment limit of MSME
• Online registration process through Udyog Aadhar Memorandum
Dr. Anoop K Pujari, Secretary, Ministry of Micro, Small and Medium Enterprises (MSME), Government of India
Speaking on the theme Dr. Guann Jhy Lee, Executive Director, Economic Division, Economic and
Cultural Centre of Taiwan in India expressed the desire for a more open and innovative policy
environment to attract FDI. This calls for change in the mindset and doingaway with redundant
procedures.There should be proper coordination between Centre and States. Government should
issues policies with clear content and stable message regarding taxation, simpler administrative
procedures.
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Dr. Guann Jhy Lee, Executive Director, Economic Division, Economic and Cultural Centre of Taiwan in India
Shri Mangal Dev, Senior Vice President, Rail Systems, Hitachi India said that technology imports
through FDI need to be nurtured by developing domestic suppliers who can provide components,
raw material and services. Government should focus on skill development to facilitate technology
absorption. Land is an essential complimentary asset for FDI. There is urgent need to facilitate quick
land acquisition for foreign investors for setting up manufacturing facilities.
Shri Ravindra Sannareddy, MD and CEO, Sri City Pvt Ltd said FDI in manufacturing requires more
land. This calls for change n Land Acquisition Act.
Shri Ajay Nijhawan, Vice President, Model Economic Township Ltd, Reliance Industries Ltd
welcomed several initiatives taken by the Government in regard to ease of doing business, make in
India. These need to be supported by faster implementation and monitoring.
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Session II: Transportation and Infrastructure Sector
Shri Arvind Kumar, Advisor, ASSOCHAM referred to significant costs imposed by inadequate transport
capacity and seamless connectivity. This is increasingly reflected in long transit time by road/rail,
delay in evacuation of cargo from ports and high turnaround time of vessels at ports. Inadequate rail
capacity has distorted modal mix of transport in favor of road which is high cost with high energy
consumption and emission per tonne km vis-à-vis rail.
Speaking on the theme Shri Harsh Dhingra, Chief Country Representative and Whole Time Director,
Bombardier India said huge investment is required in railways. At the same time the high interest
rates are holding back investment. On the other hand, benefit of lower interest cost on external
borrowings is to some extent offset by higher hedging cost to be borne by the investors. He also
emphasized the need to ease the land acquisition to facilitate faster development of freight corridors
and industrial townships.
Session III: Finance for Infrastructure Development
This session was presided over by Principal Economist, Indian Resident Mission, Asian Development
Bank (ADB), Ms. Johanna Boestel who reiterated ADB’s support to India in its initiative of Smart
Cities, Urban Rejuvenation and Transformation for 500 cities, 24x7 electricity for all, Clean India,
Make in India, Skill India. She emphasized the need for stable macro environment, more legal rights
for investors. Indian Government needs to take initiatives to develop local currency bond market to
attract large amount of investments from abroad.
Ms. Johanna Boestel, Principal Economist, Indian Resident Mission, Asian Development Bank (ADB)
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Speaking on the theme Mr. Qing Hong, CEO, ICBC, Mumbai said Indian market is being opened
to more and more foreign investments. He said that Make in India program may face challenges
due to non availability of infrastructure, skilled labor, clear and stable taxation regime, protracted
land acquisition procedures. Government should issue long term bonds to promote investment in
infrastructure sector; allow fundingin RMB denominated bonds as they entail lower costs.
Mr. Qing Hong, CEO, Industrial and Commercial Bank of China (ICBC)
Shri Bikram Sen, CEO, Arthveda Fund Management Ltd highlighted the huge investment potential
in middle income and low income housing. Government should make plans for easy availability of
finance at easy terms in housing sectors. He pointed towards problems being faced by builders in
timely completion of projects. Government needs to look into regulatory impediments.
Mr. Yasunori Takeuchi, CEO, Standard Chartered Bank Tokyo said that in India financing need is huge
so is the investment requirement. But investors are hesitant to invest alone. Government should
take steps to attract investment from bilateral/multilateral and foreign financial institutions. To
this end, Government should introduce investor friendly taxation regime, take steps in addressing
administrative problems, removing red tape completely etc.
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Mr. Yasunori Takeuchi, CEO, Standard Chartered Bank, Tokyo
Session IV: State Investment Promotion Scheme: Karnataka
Shri Manjunath Gouda, Resident Director, Government of Karnataka pointed out the unique
distinction of Karnataka as the state which produces a mix of traditional and high tech items including
silk, gold, coffee, sandalwood and aero space, biotechnology and software. He stated Government of
Karnataka has improved investment climate by judicious use of incentives available for investors such
as stamp duty exemption, reimbursement of VAT, subsidized power tariff.
Speaking on this theme Shri Kalyan Chakrabarti, MD, Rising Straits Capital highlighted the very high
concentration of private equity in a few metros like Bangalore which needs to be corrected. High
concentration of investment in a few cities/pockets is straining infrastructure.
Shri K Nagaraj Naidu, Director, ITP, Ministry of External Affairs highlighted the initiatives taken
by the Government to promote investment such as liberalization of FDI norms, simplification of
procedures, online clearances for projects and fostering a spirit of competitive federalism among
states to attract investment has made India an Investment attracting destination.
Shri Bipin Kumar, CFO, Airbus India stated that investors are looking for ready land bank, uninterrupted
supply of power and water. In Karnataka, very big push is required from the Government on
infrastructure and skill development.
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From Left to Right: Mr. Bipin Kumar Tibrewal, CFO, Airbus India; Session Moderator: Mr. K. Nagaraj Naidu, Director (ITP),
Ministry of External Affairs, Government of India; Shri G. Manjunath Gouda , Resident Director, Resident Commissioner,
Karnataka; Shri Kalyan Chakrabarti, MD, Rising Straits Capital
Important Takeaways from the deliberations at
ASSOCHAM’s First Global Investors’ India Forum
1. Positive steps by the government such as increasing FDI investment limits in the pension and
insurance sectors, 100% FDI in railway infrastructure (excluding operations), fixed time schedule
for FIPB permissions creation of Inter-Ministerial Committees focused on investors from Japan (in
collaboration with METI), USA etc. have helped create positive FDI sentiments for India. Factors
such as skilled manpower, high technical talent, low cost of HR acquisition, large domestic market
and strong government policies are some of the key reasons, investors valued, while investing in
India.
2. Interaction of ASSOCHAM with the representatives of foreign firms and investors also provided
interesting insights. Foreign Investors’ and business leaders in particular continue to be interested
in India and enthused by the large market and huge investment opportunities in the infrastructure
sector especially the smart city initiative. However they seem to be still in “wait and watch” mode
given the tax complexity and protracted process of legislative business. However, some of the
foreign investors voiced traditional concerns about the pace of reforms, regulatory impediments
constraining the growth of FDI into India. In addition, concerns about reduced global growth and
rise in US interest rates could dampen FDI inflows. Some of the suggestions made were:
a. Remove various conditionality and restrictions to make the foreign direct investment (FDI)
policy more progressive and India an attractive investment destination.
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b. Finalize and expedite release of proposed liberalized ECB norms keeping in view the overall
external position and monetary stability of India.
3. NDA Government has sought to reduce red tape and increase the attractiveness of investing in
India to foreign companies and investors. A large variety of steps have been announced by the
Central Government. These need to be operationalized at the earliest to cut down the cost of
doing business in India and include:
a) Roll out of G2B portal to serve as a one-stop shop for delivery of services to the investors
and addresses the needs of business and industry from inception through the entire life –
cycle;
b) Time based services/procedures required to be complied by investors to be filled online
through unified form and checklist.
4. Most of the investors were aware of the problems associated with land acquisition for industry
and infrastructure. Land being on the concurrent list (which implies both the State and Central
Government) have powers to initiate laws/regulations provides ample room to the State
Governments to find a way out to ease the problem of land acquisition for legitimate industrial
and infrastructure use through innovative schemes or appropriate amendments/legislations.
Most of the investors expect a more proactive approach on the part of States to address the
sensitive issue of land acquisition.
5. Investors’ have strongly favored “land bank” schemes put in place by some States to address the
constraints imposed by the Land Acquisition Act.
6. Investors’ also welcomed some of the changes made in labor laws for instance by the Government
of Rajasthan to impart much needed flexibility in labor laws in an increasingly competitive market
environment. Labor being on the concurrent list of the constitution offers State Governments lot
of scope to legislate and frame labor laws/regulations to suit their needs.
7. Central Government need to disseminate the best policy practices being adopted by the various
State Governments. This will help investors to choose location for their investment projects.
8. Competitive federalism needs better coordination between the Central and State Governments.
Incentives being offered by the states to attract investment need to be backed by availability of
supporting infrastructure and human skill development.
9. Investors’ applauded some of the initiatives undertaken by the Ministry of Micro, Small &
Medium Enterprises in operationalizing the ease of doing business which could be emulated by
the other departments at the central government and the state level as well. One of the notable
initiative and success of MSME has been the online registration process through Udyog Aadhar
Memorandum.
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Ambassador of Japan, representatives’ of JICA and leading Japanese firms in India emphasized the
following issues:
1. Need for more clarity and certainty in income tax laws having a bearing on corporate entities and
seamless transport connectivity.
2. In particular, JICA representative mentioned that Japanese companies were keen to collaborate
with their Indian counterparts on the rail project. Japan has offered to meet 80 per cent of the
Mumbai-Ahmedabad 505-kilometre High Speed Rail corridor cost estimated at U.S. $ 15 billion
at an interest rate of less than 1 per cent, on condition that India buys 30 per cent of equipment,
including the coaches and locomotives, from Japanese firms. Japan is offering both funding and
technology for the project Earlier Japan’s International Cooperation Agency (JICA) had conducted
a joint feasibility Report for this corridor.
3. In India only 1209 Japanese companies are operating which is much lower than the number
of 4,500 Japanese companies operating in Thailand, a much smaller economy. Of the 1209
companies operating in India in 2014, 136 were in Delhi, 274 in Haryana, 207 in Maharashtra and
225 in Tamilnadu and 182 in Karnataka i.e. 85 % of the companies were located in just 5 states of
India. This pointed towards the importance of infrastructure (power and transport connectivity)
and skills availability as deciding factors for Japanese investment. In order to make the spread of
Japanese investment more even States will have to focus on infrastructure and development of
appropriate skill sets.
4. JICA representative cautioned against too much emphasis on lowest cost/price offer in deciding
the winning bid for any infrastructure project to the neglect of quality. Neglect of quality and
technical aspect could prove costly in terms of higher maintenance costs over the project cycle.
5. There is need to upgrade technical specifications of projects which are open to global competitive
bidding. For instance projects related to sewage management, water purification and many
urban services still carry technical specifications pertaining to old/obsolete technologies which
are no more in vogue in Japan or in other developed countries or even in South East Asia. These
outdated specifications make it extremely difficult for Japanese companies to participate in the
tendering process despite their cost and technological advantage.
6. Leasing or renting assets (e.g. machinery or office equipment) can save substantial initial costs
of buying them outright. It offers huge potential in transportation (railways, road construction
equipment, mining etc). It has several advantages which inter alia include: access to a high
standard of equipment that you might not have been able to afford otherwise; the leasing
company carries the risks if the equipment breaks down; as long as you make regular repayments
for the period of the lease, the agreement can’t be cancelled.
7. Need for fresh approach towards reviving stressed/stranded infrastructure projects in the
highway sector. Instead of handing those over to asset reconstruction companies or financial
institution holding a majority stake in terms of lending exposure these could be assigned to a
25
new management or firms with experience of managing such projects to nurture them back
to recovery. In addition, there is urgent need to inject both new technology and management
techniques to reduce the costs of operation.
8. Expand the ambit of vocational training/disciplines which are restricted to 400 trades as of
now.
9. Regulatory institutions need to have representation from all stakeholders and need to strike a right
balance between regulation and development of the sector they are entrusted to regulate.
10. Launch entrepreneurship and innovation incubation program, with a defined mandate to promote
entrepreneurship in India through a new initiative called “FIVE” (Funding, Incubation, Vesting,
and Expansion) framework. This initiative will act as a nursery for budding entrepreneurs with
innovative ideas which traditional financial institutions would be reluctant to finance.
11. In India it takes much longer for FDI to fructify when compared to Thailand, Malaysia in particular.
One of the reasons is it takes longer to establish and nurture supply chain network in India. Quite
often the foreign investor has to absorb part of the cost. This shortcoming can be overcome
through partnership amongst the government, Indian private sector and the foreign investor. This
calls for a long term strategy encompassing skill formation, cluster development and supporting
infrastructure.
12. Lack of inadequate and inefficient transport capacity and seamless connectivity imposes
significant costs in terms of high logistics costs and erodes competitiveness of Indian exports.
This is increasingly reflected in long transit time by road/rail, delay in evacuation of cargo from
ports and high turnaround time of vessels at ports. Inadequate rail capacity has distorted modal
mix of transport in favor of road which is high cost with high energy consumption and emission
per tonne km vis-à-vis rail. There is need to develop large logistics park and intermodal hubs to
provide seamless connectivity. Also the coastal shipping needs to be promoted by incentivizing
movement of bulk cargo by inland waterways.
13. Need to convert Global Investors’ India Forum from an event to an organization dedicated
to the cause of promoting FDI into India. The organization should be lean and storehouse of
relevant information pertaining to India’s investment policies. It should serve as the bridge
between foreign investors, foreign chambers of commerce, ASSOCHAM’s foreign branches on
one side and various agencies of the Government of India involved in processing of foreign
investment proposals on the other. It has to work 24*7. This may need an interactive internet
medium. Its structure and organizational details could be worked out after deliberations with
stakeholders.
____
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Foreign Direct Investment (FDI) status
(Source: DIPP and RBI Website)
27
28
ASSOCHAM : THE KNOWLEDGE ARCHITECT OF CORPORATE INDIA
Evolution of Value Creator: ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. Having in its fold more than 400 Chambers and Trade Associations, and serving more than 4,50,000 members from
all over India. It has witnessed upswings as well as upheavals of Indian Economy, and contributed significantly by
playing a catalytic role in shaping up the Trade, Commerce and Industrial environment of the country.
Today, ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine
the dynamics of growth and development in the technology driven cyber age of ‘Knowledge Based Economy’.
ASSOCHAM is seen as a forceful, proactive, forward looking institution equipping itself to meet the aspirations of
corporate India in the new world of business. ASSOCHAM is working towards creating a conducive environment of
India business to compete globally.
ASSOCHAM derives its strength from its Promoter Chambers and other Industry/Regional Chambers/Associations
spread all over the country.
Vision: Empower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the barrierless
technology driven global market and help them upscale, align and emerge as formidable player in respective
business segments.
Mission: As a representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs and
interests of its members. Its mission is to impact the policy and legislative environment so as to foster balanced
economic, industrial and social development. We believe education, IT, BT, Health, Corporate Social responsibility
and environment to be the critical success factors.
Members – Our Strength: ASSOCHAM represents the interests of more than 4,50,000 direct and indirect
members across the country. Through its heterogeneous membership, ASSOCHAM combines the entrepreneurial
spirit and business acumen of owners with management skills and expertise of professionals to set itself apart as
a Chamber with a difference. Currently, ASSOCHAM has more than 100 National Councils covering the entire gamut of economic activities in
India. It has been especially acknowledged as a significant voice of Indian industry in the field of Corporate Social
Responsibility, Environment & Safety, HR & Labour Affairs, Corporate Governance, Information Technology,
Biotechnology, Telecom, Banking & Finance, Company Law, Corporate Finance, Economic and International
Affairs, Mergers & Acquisitions, Tourism, Civil Aviation, Infrastructure, Energy & Power, Education, Legal
Reforms, Real Estate and Rural Development, Competency Building & Skill Development to mention a few.
Insight into ‘New Business Models’: ASSOCHAM has been a significant contributory factor in the emergence
of new-age Indian Corporates, characterized by a new mindset and global ambition for dominating the international
business. The Chamber has addressed itself to the key areas like India as Investment Destination, Achieving
International Competitiveness, Promoting International Trade, Corporate Strategies for Enhancing Stakeholders
Value, Government Policies in sustaining India’s Development, Infrastructure Development for enhancing India’s
Competitiveness, Building Indian MNCs, Role of Financial Sector the Catalyst for India’s Transformation.
ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of Commerce &
Industry, Mumbai; Cochin Chambers of Commerce & Industry, Cochin: Indian Merchant’s Chamber, Mumbai; The
Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New Delhi.
Together, we can make a significant difference to the burden that our nation carries and bring in a bright, new
tomorrow for our nation.
D. S. Rawat
Ajay Sharma
(Secretary General)
(Senior Director)
Global Investors’ India Forum
C/o The Associated Chambers of Commerce and Industry of India
ASSOCHAM Corporate Office: 5, Sardar Patel Marg, Chanakyapuri, New Delhi-110 021
Tel: 011-46550555 (Hunting Line) • Fax: 011-23017008/9 • E-mail: [email protected] • Web: www.assocham.org
29
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global investors` india forum

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