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INDIA’S FDI POLICY AMONG THE MOST LIBERAL IN THE WORLD: KAMAL NATH
Date : 19 Oct 2004
Location : New Delhi
Shri Kamal Nath, Union Minister of Commerce & Industry, has said that India’s investment policies, including policies on foreign direct investment (FDI), are among the most liberal in developing economies. While inaugurating the OECD-India Investment Roundtable here today, Shri Kamal Nath said there were no restrictions on FDI in most sectors in India and the Indian government welcomed foreign direct investment. "What we really want is FDI that generates the maximum economic activity, and, thereby creates employment, that creates wealth for ordinary people…. We especially look to FDI in manufacturing sectors and in greenfield projects", the Minister said. Mr. Richard Hecklinger, Deputy Secretary General, Organisation for Economic Cooperation and Development (OECD) and Shri Sunil Kant Munjal, President, Confederation of Indian Industry (CII) were present at the inaugural function along with members of the diplomatic corps and representatives of trade and industry.
Shri Kamal Nath said that the medical expertise and para-medical skills available in India made it an ideal place for pharmaceuticals and clinical research. "Our Patent Law is currently fully TRIPs-compliant. Our obligations require that we provide for product patent protection with effect from 1st of January next year. We shall do it", the Minister said. He indicated that India would become one of the largest economies in the world over the next two decades and establishing a strong presence in India, therefore, would be a strategic necessity for business corporations.
Shri Kamal Nath said that overseas investments by Indian companies had exceeded $ 3 billion in the last two years, with nearly 60% in the manufacturing sector. He underlined India’s telecom sector as one of the fastest growing in the world today, with the number of mobile phones increasing at over 50,000 each day. "While the software prowess of Indian manpower has come into sharp focus, our manufacturing skills, particularly in high precision, high-tech sectors have not received adequate attention from foreign investors", the Minister said adding that the most of the top vehicle manufacturers and their suppliers were sourcing high-quality auto components from India.
The Minister indicated that a Bill on Special Economic Zones (SEZs) would be introduced in Parliament by the end of this year which will include Bio-Technology Parks and Free Trade and Warehousing Zones (FTWZs). In all these, FDI upto 100% would be permitted, including in the real estate development and establishment of the Zones. "We see SEZs as hubs of manufacturing and FTWZs as trading hubs", Shri Kamal Nath said. On outsourcing, the Minister pointed out to several authoritative studies which have shown that outsourcing was a win-win situation. "India benefits no doubt but so do the foreign companies; and the additional profitability of the companies sustains and creates more jobs in the developed countries as well. We should seek out more innovative areas for outsourcing and benefitting from the comparative advantage and complementarities of our economies", he said.
The theme of India Investment Roundtable is "Opportunities and Policy Challenges for Investment in India". It will be followed by a two-day Global Forum on International Investment which will focus on "Investment for Development: Forging Partnerships". These events are being organised by the Department of Industrial Policy & Promotion (IPP), Ministry of Commerce & Industry, along with OECD and CII. The event – which is being attended by about 250 delegates from all over the world – will help in enhancing mutual understanding on investment related issues between India and OECD economies.
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