FDI – Integrating India with the World

Happenings

Involving a plethora of investor classes, foreign investment can take multiple forms. An overseas investor can buy directly into a company involved in manufacturing, infrastructure development, banking, insurance, retail, etc.

Involving a plethora of investor classes, foreign investment can take multiple forms. An overseas investor can buy directly into a company involved in manufacturing, infrastructure development, banking, insurance, retail, etc. If the investment is 10 percent or more of a company’s equity, it is classified as Foreign Direct Investment (FDI) as per OECD norms.

Given India’s need for foreign investment to finance its current account deficit, the PHD Chamber organised a Seminar on FDI: Opportunities and Challenges on July 10, 2015 in New Delhi. The Diplomatist Magazine was the Print Media Partner for the event.

The inaugural session was presided over by Mr. Alok B. Shriram, President, PHD Chamber, who mentioned about the importance of FDI for India and how it has been instrumental in providing stimulus to the Indian economy.

Mr. Shriram set the tone for the day-long seminar by highlighting the potential of PM Narendra Modi’s ‘Make in India’ campaign.

“After the successful launch of ‘Make in India’, FDI jumped by 56 percent during the last 5 months,” he said.

“Although India is a preferred investment destination amongst the BRICS countries, there are hindrances such as inadequate infrastructure, inflexible labour markets, bureaucratic controls, complex procedures relating to land acquisition and clearances, lack of centre-state coordination, regulatory and tax system-related challenges,” he added.

Projecting an Investor-friendly Image of India

Mr. Sanjay Aggarwal, Chairman, Foreign Trade and Investment Committee, PHD Chamber said that for a developing country like India, it is essential to reap the maximum benefits from FDIs.

“There is a need to create conducive atmosphere that is investor-friendly. Hand holding for investors is important to overcome various government clearances and compliances,” he said.

Trade Exclusive Clubs are the Way Forward

Dr. Subir Gokarn, Director-Research, Brookings India & Former Deputy Governor, Reserve Bank of India, touched upon the forces that are shaping the prospects for investments in India.

“The triangular forces of transaction costs, technology and trade will shape up the future of Indian investments. Issues related to skill, HRD, procedures, infrastructure, logistics, tax regimes, etc, can be dealt with in order to lower the overall transaction costs. India should enter the trade exclusive clubs since multilateralism is receding at the backburner,” he opined.

Ease of Doing Business in India

Make in India remained the flavour of the seminar. Mr. Atul Chaturvedi, Joint Secretary, Department of Industrial Policy and Promotion, Government of India, maintained that to improve ease of doing business in India, Make in India is the key.

“The multiple initiatives such as Skill India, Digital India, and 100 Smart Cities project, will bring investments into the country. Most of the items for defence production have been taken out from licensing list, and the government is also trying to further liberalise the FDI regime by permitting 100 percent foreign capital in defence sector with the approval of the government on a case-by-case basis”, he said.

“Since the launch of the Make in India in September 2014, FDI into India in the period October-April has risen by around 48 percent over the same period last year. The fact that India is the most liberalised economy in the world (according to OECD) and that India is amongst the top 10 countries in terms of FDI being received globally (according to UNCTAD) indicates that India is moving in the right direction. However, there are challenges that still exist. One of the challenges has been to improve the ground level work at the sub-national level and to bring in competitiveness among the states,” Mr. Chaturvedi concluded.

FDI – Foreign Investor Perspective

Several diplomats present at the seminar - Dr. Corinna Fricke, Minister Counsellor, Head of Economic & Commercial Division, Embassy of the Federal Republic of Germany, New Delhi; Mr. John McCaslin, Minister Counsellor for Commercial Affairs, US Embassy, New Delhi; Dr. Guann-Jyh Lee, Executive Director, Economic Division, Taipei Economic & Cultural Centre (TECC), New Delhi; Mr. Aurodeep Nandi, Senior Economic Adviser, British High Commission, New Delhi & Mr. Christ Guido, Dy. Director General, Indo-German Chamber of Commerce also shared their inputs.

The diplomatic community highlighted the flow of investments from their countries to India and vice-versa, and identified the core sectors for engagement.

Unlocking the True Potential of Indian Markets

Mr. Pradeep Kumar Rawat, Joint Secretary (EA), Ministry of External Affairs, Government of India, lauded the steps taken by the NDA government.

“The recent initiatives launched by the Hon’ble Prime Minister Narendra Modi such as Make in India, Digital India and Committee on Ease of Doing Business will help in unlocking the true potential of the Indian markets. FDI is an important aspect for any economy, since it directly helps in up scaling the skills of the work force, enhances GDP and is a growth catalyst for the manufacturing sector since it brings in new technology, processes and best global practises in the domestic markets. It also helps in integrating the domestic markets with global supply and value chains,” he said.

Mr. Dushyant Thakor, General Manager, Invest India; Brig. H P S Bedi, Consultant, Defence Committee, PHD Chamber; Mr. S. K. Sethi, Vice President, Insurance Foundation of India; Mr. Sujay Paul, Director, KPMG; Mr. Harsh Shrivastava, Sr. Vice President (Corporate Affairs), SREI Infrastructure Finance Ltd; Mr. Vikas Vig, Senior Partner, Mohinder Puri & Co.; Mr. Chander Sawhney, Partner & Head Valuation & Deals, Corporate Professionals Capital Pvt. Ltd. & Mr. Michael Wekezer, Head-Delhi Office, Roedl & Partner India Pvt. Ltd were other prominent speakers at the seminar.

Around 20 diplomats from over 16 countries, including Britain, European Union, Finland, Germany, Indonesia, Latvia, Luxembourg, Malawi, Nepal, New Zealand, Poland, South Africa, Taiwan, Turkey, USA, Zimbabwe, attended the event.

The event was sponsored by SREI Infrastructure Finance Ltd., Corporate Professionals Capital Pvt. Ltd., Navyug Sewing Machine Co. Ltd., and Paramount Communications Ltd. The Knowledge Partner was RNCOS Business Consulting Services.

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Author

Alankar Srivastava
Alankar Srivastava

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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