Manmohan Singh asks Japanese companies to be part of India's growth story

Projecting India as a "growing and vibrant" market, Prime Minister Manmohan Singh has invited Japanese companies to be part of "our ambitious development plans" with a promise of improving the investment climate for foreign investors.

Ahead of his meeting with Japanese business leaders in Tokyo tomorrow, Singh said a number of steps have been taken to simplify the FDI regime and the government has started stakeholder consultations on opening up additional sectors to greater inflow of FDI.

He said the Comprehensive Economic Partnership Agreement (CEPA), negotiations for which have been concluded, would boost the bilateral trade and economic ties manifold.

"Our government places the highest importance on improving the investment climate for foreign investors in India. We recognise the multiplier effects of improving infrastructure on the growth of Indian economy," Singh told a select group of Japanese journalists in Delhi ahead of his visit here.

"It is heartening that India is now recognised as the best long-term investment destination by Japanese companies. We welcome Japanese investments in India," the prime minister said.

"I would encourage Japanese investors to come to India and become part of our ambitious development plans," Singh said.

While inviting Japanese companies to step up their investments, he observed, "Today, India offers a growing and vibrant market, young work force, and an attractive destination for foreign investors".

He said new policies are enabling public-private partnership in the development of critical infrastructure like roads, ports, airports and power.

"In recent years, the policy framework relating to investment, taxation, foreign trade, finance, capital markets and regulatory systems has evolved to make Indian industry more productive and globally competitive," Singh said, adding "As a result, India's share in the global flows of goods and services has grown steadily".

Talking about FDI norms, he said, all regulations and guidelines have been consolidated into one comprehensive document, which is reviewed every six months.

Referring to the Dedicated Freight Corridor Project as well as the Delhi-Mumbai Industrial Corridor Project, which are being built with Japanese assistance, he said these will open up vast opportunities for Japanese businesses for mutually beneficial cooperation.

The prime minister told the Japanese journalists that India was in the midst of a major socio-economic transformation.

He noted that Indian economy has grown at an average annual rate of over 9% in the last few years, managing sustained growth despite the global economic slowdown.

Emphasising his government's commitment to economic reforms as the "principal instrument of economic transformation and inclusive growth," Singh said, "there is an increasing appreciation that calibrated and sustained change is better than abrupt about turns".

The policy framework relating to land, environment and resettlement and rehabilitation remains under constant review, he said, while pointing out that the government had formulated the National Rehabilitation and Resettlement Policy in 2007.

He said his government is also committed to improve the efficiency of the tax system by eliminating distortions in the tax structure, introducing moderate levels of taxation, expanding the taxable base, promoting equity while enhancing revenues and simplifying taxation provisions.

"The new Direct Taxes Code has been unveiled with these objectives and is expected to come into effect shortly. Efforts are also underway to reform the indirect tax regime by introducing a country wide Goods and Services Tax, based on a consensus between the different stakeholders," Singh said.