Prime Minister Narendra Modi will on Thursday urge the bosses of some of the world’s biggest manufacturers to set up shop in India as he tries to shed the country’s reputation as a quagmire of red tape and high taxation.
The CEOs of Airbus, Mercedes-Benz and Samsung Electronics are among those invited to the launch of the ‘Make in India’ campaign as part of a push by Modi to make the country a global manufacturing hub.
The launch will feature a keynote address from the new right-wing premier on the eve of his departure for the United States.
Programmes will also be held in state capitals and Indian missions abroad where officials will engage with investors simultaneously, a senior official in the department of industrial policy and promotion told AFP.
“Invites have been sent out to top leaders and CEOs of about 3,000 companies from 30 countries for the launch,” he said on condition of anonymity.
“The idea is to send across the message to foreign investors that India is becoming a better place to do business.”
Although India has relaxed rules for foreign investors, any company seeking to do business has to go through byzantine rules and regulations apart from having to deal with a stringent tax regime.
The World Bank recently placed India a poor 134th among 189 economies in its ease of doing business report while regional rival China ranked 96th.
British mobile giant Vodafone is locked in a $2.4 billion tax row with the Indian government while Finnish company Nokia also saw its plant in India being seized over a tax dispute.
Modi’s right-wing Bharatiya Janata Party swept to power in May on a mandate to revive the economy which is going through the worst slowdown in two decades.
Since his election, Modi has bagged investments to the tune of $34 billion from Japan and another $20 billion from China mainly to help upgrade its creaking infrastructure.
— Red carpet for investors —
In the lead-up to the launch, the government has revamped an Invest India unit which will now act as the “first reference point” for guiding foreign investors on all aspects of regulatory issues.
“The government is closely looking into all regulatory processes with a view to making them simple and reducing the burden of compliance on investors,” the finance ministry said in a statement on Wednesday.
In addition, a newly created web portal www.makeinindia.com will answer all investment-related queries from business entities.
The government has identified 25 sectors including automobile, aviation and construction that have potential to attract investment.
Although it has promised to open up the insurance, defence and transport sectors to foreign investors, the government has also closed the door on foreign supermarket chains such as WalMart who had been hoping to enter the Indian market.
The campaign comes just a day before Modi is set to travel to the United States where he will have breakfast with heads of Google and PepsiCo in another bid to fetch investments for Asia’s third-largest economy.
The government’s manufacturing push comes at a time when many global companies are seeking an alternative to China as costs and risks there rise.
“India can become an alternative to China for global manufacturers,” Anjan Roy, an independent economist based in Delhi told AFP.
“We have a large domestic market that is being largely serviced from imports. We can change this with manufacturing locally.
“Manufacturing has been lagging for a long time, growth in this sector has been marginal and sometimes it has even slipped into the negative zone. So this push by Mr Modi is very timely.”