global investors' india forum

THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA

Investment & Technology Promotion DivisionMinistry of External AffairsGovernment of India

GLOBAL INVESTORS’INDIA FORUM

23rd & 24th September, 2015 • New Delhi

PROCEEDINGS & RECOMMENDATIONS

Day-2Inauguration

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

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

GLOBAL INVESTORS’ INDIA FORUM23rd and 24th September 2015, Hotel Taj Mahal, New Delhi

Program Highlights at a Glance

• ASSOCHAMwouldliketothankthefollowingfortheiractivesupportcooperationandparticipationintheGlobalInvestors’IndiaForum.

• ThistwodaysGlobalInvestors’IndiaForumprogramwasorganizedwithsupportfromInvestment 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.

• TheWorld Association of Investment Promotion Agencies (WAIPA), headquarteredinTurkey promotedbyUnited Nations Conference on Trade and Development (UNCTAD), with presence in more than 130 countries, with 170 InvestmentPromotionAgenciessupportedtheGlobalInvestors’IndiaForum.

• BusinesschambersrepresentingAsiaPacific,America,LatinAmerica,Africa,Europe,UAEactivelyparticipatedinthedeliberation.

• LeadingChineseandJapaneseFinancial Institutions/BanksAddressedtheForumincluded the World’s Leading Banks ICBC (Industrial and Commercial Bank ofChina).

Proceedings and Recommendations of Assocham’s Global Investors’ India Forum 3

GLOBAL INVESTORS’ INDIA FORUMSeptember 23-24, 2015, New Delhi

PROCEEDINGS AND RECOMMENDATIONS

ASSOCHAMFirstGlobalInvestors’IndiaForummeetwasheldovertwodays,23rdand24thofSeptember,2015.TheeventwasactivelysupportedbyahostofCentralGovernmentMinistries/

DepartmentsandStateGovernments.These includedMinistryofExternalAffairs (Investment&TechnologyPromotionDivision),MinistryofMicro,Medium&SmallEnterprises,MinistryofPower.InadditionvariousStateGovernmentsalsoparticipatedandactivelysupportedthiseventwhichincludedGovernmentofJharkhand,GovernmentofOdisha,GovernmentofTamilnadu,GovernmentofTelenganaandGovernmentofKarnataka.

InadditiontheeventreceivedsupportfromanumberofinternationalagenciessuchasUNCTAD’sWorld Association of Investment Promotion Agencies (WAIPA), Japan International CooperationAgency(JICA),andJapanExternalTradeOrganization(JETRO).Besides,8internationalChambersofCommerce& Industry, country/regional representatives fromASEAN, Japan, China,UAE, Canada,Europe,FranceandGermanyparticipatedactivelyinthisevent.Leadingfinancialinstitutions,banks,private equity, government officials, diplomats, decisionmakers and the leaders from theGlobalIndustryparticipatedinthismeet.YesBankactedasKnowledgePartneralongwithEconomicTimesasMediaPartner.

(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

4 Proceedings and Recommendations of Assocham’s Global Investors’ India Forum

DAy 1 : INAUGURAL SESSIONKeynote address

TheinauguralsessionwaspresidedoverbyShri Shaktikanta Das, Secretary, Department of Economic Affairs, Ministry of Finance. SpeakingontheoccasionhesaidIndia’sinvestmentactivityisshowingsignsofrevival.GovernmentisdeliberatingonwaystoloosenfurthersectoralcapsforFDI,addressdemandrevival,boostfinancialsavingsthroughGoldbondsandcreaterobustregulatoryframework.Governmentisworkingtowardsprovidingastableandsimpletaxationregimewithgreatercertaintyand implementingGood and Service Tax (GST) is top priority. He also said that strong steps andmeasuresarebeingtakenfor‘MakeinIndia’byimprovingEaseofDoingBusiness,dismantlingoldproceduresandrulesandeasinginfrastructureconstraints.Additionally,hementionedthatanewenablingframeworkforfosteringStart-Upswasbeingworkedoutalongwithdemandrevivalthroughstructuraladjustmentsmeasuresratherthanresortingtofiscalandmonetarystimulus.

Additionally,hehighlightedthefollowingsixinitiativestheGovernmentistakingtoboostEconomicSentimentandSpurIndustrialGrowthintheCountry:

1. AugmentingResourceFlowintoBanks:EffectivestepswerebeingtakentoaddressstressedassetsofthebankalongwithGovernanceissueswiththehelporthe“Indradhanush”scheme

2. DeepeningEquityandDebtMarkets:GovernmentandregulatorsareworkingtofurtherdeveloptheCorporateDebtMarket,andtomakeitattractivetosmallinvestors.

Mr. Shaktikanta Das, Economic Affairs Secretary, Ministry of Finance, Government of India


3. SimplifyingRulesrelatedtoExternalCommercialBorrowings(ECBs):GovernmentwasindiscussionswiththeReserveBankofIndia(RBI)toeasesomeoftherulesforexternalcommercialborrowings(ECB),adding“soon”.Tothisend,RBIwouldissuesoonadraftpaper.

4. FurtherFDIReforms:TheGovernmenthasundertakenaseriesofreformsintheFDIpolicy,butstillmoreistobedone.ASimple&ProgressiveFDIPolicyisbeingworked,byremovingcomplexitiesrelatedtosectoralcaps.

5. BoostingFinancialSavings:WhiletheGoldBondandGoldMonetizationschemewillchannelizefinancialsavingsawayfromphysicalassetlikegold,theGovernmentisworkingonmoremeasurestopushupfinancialsavings.

6. Governmentiscommittedtoprovidingasimpleandstabletaxationregimewithahighlevelofcertainty:Anumberofissuesontransferandadvancepricinghavebeenresolved.TheGovernmentisworkingonintroducingGSTassoonaspossibleandtheadministrativemeasuresareinplace.

Shri Rana Kapoor, President, ASSOCHAM, MD and CEO, YES Bank inhisinauguraladdressrecalledsomeofthesignificantreforminitiativesundertakenbytheGovernmentinthebackdropoffallinginflation, shrinking current account deficit as a proportion of GDP and fiscal consolidation. ShriRanaKapoordrewattentiontosomesignificantpolicyinitiativesundertakenbythegovernmenttostrengthenthegrowthmomentumsuchas:

• StepupinmodernizationandinvestmentactivityinIndianRailways.Theseincludemodernizationandupgradationof400railwaystations,installationofticketvendingmachines,procurementofrailwayrollingstockandlocomotives,speedinguptheprocessofimplementationofdedicatedfreightcorridors.

• EstablishingastrongandvibrantbrandIndiathroughacombinationofstrategicinitiativessuchasMakeinIndia,SkillIndia,DigitalIndia,StartupandStandupIndia.

• InjectingspiritofcompetitivefederalisminIndia’sfederalpolity.Thishasledtoimprovementinvariousparametersimpactingeaseofdoingbusinessacrossstates.

• Issueoflicensesto10newbankswithaviewtomakebanking/financialservicesmoreinclusive.

• UseofJandhan,Aadhar,andMobile(JAM)trinityinimplementingdirecttransferofbenefits.


Shri Rana Kapoor suggested formationof anentrepreneurship& innovation incubationprogram,withadefinedmandatetopromoteentrepreneurshipinIndiathroughFunding,Incubation,Vesting,andExpansion(FIVE)framework.

Shri Sunil Kanoria, President Elect, ASSOCHAM, Vice Chairman, SREI Infrastructure Finance Limited referredtounfoldingandrevivalofIndia’sgrowthstoryoverthelastfewmonthswhichhasgivenafilliptotheinvestmentsentiment.Someoftheimportantsuggestionsmadebyhimwere:

• Need to turnaround stressed infrastructure assets throughnewpartnership andmanagementinitiatives rather than selling these to Asset Reconstruction Companies (ARCs) at heavydiscounts.

• Useoftechnologytobringdownconstructioncostsandimproveoperationalefficiency.

• Expandtheambitofvocationaltraining/disciplineswhicharerestrictedto400tradesasofnow.

• Regulatoryinstitutionsneedtohaverepresentationfromallstakeholders.Further,theyneedtostrikearightbalancebetweenregulationanddevelopment.

• Useofleasingtocreateassetsintransport,mining,railcarsetc.

Shri Rana Kapoor, President, ASSOCHAM, Managing Director and CEO, YES Bank


Mr. Ismail Ersahin, Executive Director, World Association of Investment Promotion Agencies (WAIPA)saidIndiahasalargepopulationandyoungdemographicprofilewhichisamajorplusintermsofavailabilityofhuman resources.Government’s liberalpoliciesand reformsundertakenhavesettheballrolling.RedTapehasbeencut.RegulatoryapprovalshavebeenstreamlinedtopromoteEaseofDoingBusiness;Indiaisaneasierplacetodobusinessthananyothertimeinthepast.Hewelcomed themove tobringdown thecorporate taxesand implementingofGoods&ServicesTax(GST)by2016.Sincethelaunchof‘MakeinIndia’,Indiahasseenanincreaseof48%inFDI.Itshowsmuchgrowthbutstillshortofitspotential.

Shri Sunil Kanoria, President Elect, ASSOCHAM, Vice Chairman, SREI Infrastructure Finance Limited


Shri Girish Pillai, Advisor, Railway Board highlighted the huge investment requirement for theRailway InfrastructurebyquotingDr. SamPitrodaCommitteeReport (2012).According towhichRailwaysshouldhaveRs8.5lakhcroreofinvestmentinthenextfiveyears.HesaidthatGovernmentwasfacingchallengetooperatepassengertrainsandfreightstrainoncommonrailwaytrack.Thishasresultedinhugecongestionontherailnetwork.HecategorizedtheinvestmentinRailwaysasfollows.1. RequirementofUS$140Billionoverthenext5yearsofwhich50%ofinvestmentwillberequired

innewnetworksandenhancingtheexistingnetworks.2. 25%ofthebudgetedrailwayexpendituretobeinvestedannuallyinrollingstockmanufacturing

facilitiesanditsprocurement.3. Thereishugeamountofinvestmentrequiredtobemadeinpassengeramenitiesandfacilitiesto

improvethecustomerexperience.4. Substantialinvestmentrequirementforrailwaystationdevelopmentandmaintenance.

HisExcellency,Mr. Takeshi Yagi, Ambassador, Japan, drewattentionto risingFDI fromJapanandJapan’sabidinginterestincreationofinfrastructureassets.Heemphasizedtheneedfor:

• EarlyimplementationofGST.

Mr. Ismail Ersahin, World Association of Investment Promotion Agencies (WAIPA)


• Certaintyandclarityontaxationissuesincludedpermanentestablishmenttaxationandtransferpricing.

• Easingofinfrastructurebottlenecksatports,highwaysensuringseamlesstransportconnectivity.

Shri Sandeep Jajodia,Vice President, ASSOCHAM,ChairmanandManagingDirector,MonnetIspatandEnergyLtd,presentedthevoteofthankstoallthepanelist,dignatoriesanddelegations.

SESSION I: RED TAPE TO RED CARPETThissessionwaspresidedoverbyDr. Saurabh Garg, Joint Secretary (Investments), Department of Economic Affairs, Ministry of Finance, Government of India whopointedoutthat90%ofFDIcomingintoIndia,comesthroughautomaticroutewherenoapprovalisrequiredsubjecttoregistrationwithRBI.Only10%ofFDIrequiresapprovalfromregulatoryauthoritiesduetothecapsincertainsectorsorduetothestrategicnatureofconcernedsectors.Ministry’sconstantendeavouristohaveapolicywhichissimplertounderstandandsimplertoimplement.EvenwhereFDIcomesthroughautomaticroute,anattemptfromtheministryistohaveweb-basedinteractivemodetoremovetheneedforanypersonalinteraction.

His Excellency, Mr. Takeshi Yagi, Ambassador, Japan


Shri Sanjeev Gupta, Managing Director, AccentureapplaudedGovernmentinmakingBrandIndiaa success storydespite challengingtimes.But there are few issueswhereGovernment focus isrequired.InfrastructureisareawhereindustrywantstoseesomeinitiativesfromtheGovernmentlikeneedtostreamlineprocessandprocedures intaxation.Bothdomesticandforeign investorsexpectsimplificationandclarity.Alsolaborreformsneedtobepushedfromindustryperspectivebecause labor required in service industry is entirely different from that of manufacturingindustry.

Speakingonthetheme,Mr. Pan Song, Managing Director of Fosun Group, China acknowledgedthateconomyofIndiaisdoingbetterthanthatofChinaifwelookattheGDPgrowthrate.InhisviewIndiaislookingforinvestmentinareas,namely,financialsectorincludinginsuranceandassetManagement,pharmaceuticalsandhealthcare,constructionincludingresortsandbudgethotels,realestate.

Dr. Saurabh Garg, Joint Secretary (Investments), Department of Economic Affairs, Ministry of Finance, Government of India


Mr. Kazuharu Kono, Secretary General of Japan Chambers of Commerce and Industry in IndiasaidifIndianeedsmoreinvestmentGovernmentshouldreachtosmallandmediumenterprisesinJapanandshouldtakeinitiativestomakethemawareaboutinvestmentpoliciesandproceduresinIndia.Japanesecompaniesfaceriskanddifficultyontaxationfront.Therefore,GovernmentofIndiashouldhavesimpleandstableregulatoryframework.HealsosaidthatJapanesecompaniesfeelthatthere is insufficient infrastructurewhich isnotproviding themvalueandcostbenefit in longrun.Governmentshouldmakethestartupprocessandestablishmenteasiersothatnewventurescanbesetupeasily.

Mr. Pan Song, Managing Director, Fosun Group, China


Shri Getambar Anand, Spokesperson President, CREDAI said that there is clarity of thoughtregarding ease of doing business in India and various StateGovernments havemoved forwardto improve the investment climatebyoffering incentives, easing infrastructurebottlenecks andholdingdialoguewithinvestors.However,atthelowerlevel,businessmenstillfaceobstaclesandchallengesintransactingbusinessasmanyproceduresaretobefollowed.So,hesuggestedthatGovernmentshouldtakestepstopursuetheinitiativessuchas‘MakeinIndia’,‘DigitalIndia’,‘EaseofDoingBusiness’atthefieldlevel.

SESSION II: URBAN REJUVENATION AND TRANSFORMATIONShri Rahul Sharma, Chairman, Japan India Business Promotion Council highlighted lack of orinadequate availability ofwater, sewerage treatment,waste treatmentplant, cleaningof air bytechnology,recycling/treatmentofmunicipalwasteetc.TheseservicesneedtobeprovidedbytheGovernment.HesuggestedGovernmentneedstoupgradeitstechnicalspecificationswhileinvitingtendersaspertoday’srequirementandshouldconsiderqualityandtechnicaldimensionsofthebidalso.

Mr. Kazuharu Kono, Secretary General of Japan Chambers of Commerce of Industry in India (JCCII)


Speaking on this theme Shri Subrata Mitra, Director, Public and Government Affairs, HUAWEI Telecommunications India saidthechallengebeforetheGovernmentishowtoaccommodatethemovementofpeoplefromruralareastothecongestedurbanareas.HesuggestedthatGovernmentshouldfocusonbuildingadigital infrastructureinurbanareas;smartcitiesmusthavehighspeedcommunicationnetworks,smarttrafficmanagement,smartsurveillancesystemsforsafety,systemofmonitoring pollution level and compliance to environmental standard. He also suggested thatGovernmentshouldtakeaholisticperspectiveonurbanutilitiessuchaspower,water,drainage,gas.

Shri Sachin Pant, CEO, Innovest Ventures saidGovernmentshouldcheckthestateofutilitiesandurbanservicessuchaswater,sewerage,wastemanagementandtransportationonaregularbasis.Managementofcitiesshouldbeundertakenthroughjointpartnershipmodeinvolvingprivateinvestorandurbandevelopmentauthority.

Mr. Takema Sakamoto, Chief Representative, Japan International Cooperation Agency (JICA) India saidgrowthbringsbothopportunitiesandchallenges.Governmentshouldtakeaggressivestepsininfrastructuredevelopment,policyandinstitutionalimprovement,humanresourcedevelopment.HesuggestedthatGovernmentshouldencourageprivatesectorparticipationwhereverpossiblebecausepublicsectorwon’tbeabletoachieveallobjectives.Headdedthaturbanareasareengineofgrowth.InIndiaurbanareasaccountfora30%ofpopulationand60%shareinIndia’sGDP.TosustainurbandevelopmentGovernmentshouldtakecareoftransportation,watersanitation,wastemanagement,energyrequirementsinurbanareas.

Mr. Takema Sakamoto, Chief Representative, Japan International Cooperation Agency (JICA) India


SESSION III: STATE INVESTMENT PROMOTION SCHEME: ODISHAThissessionwaspresidedoverbyShri Sanjiv Chopra, Principal Secretary, Government of Odisha who mentioned that many initiatives have been undertaken by the Government of Odisha tochange imageandperceptionamong thebusinesscommunityand investors.HedrewattentiontothepotentialofOdishaasithashugedepositsofnaturalresourcessuchasCoal,Bauxite,andManganeseetc.HementionedpacakageofincentiveswhichGovernmentofOdhisaasofferedtoinvestorstheseinteraliaincludesubsidizedcostoflandforworker’shostels,landbankof75000acreforindustrialuse,taxreimbursementsfortwoyears,capitalsubsidyforplantandmachinery,stampdutyexemption.

SpeakingonthisthemeShri P Balaji, Director, Regulatory, CSR and External Affairs, Vodafone India saidthereisaneedforcoordinationbetweenStatesandtheCentralGovernmentandsynergybetweenpublicandprivatesector.Hepointedoutthatthereshouldbecontinuoussupplyofpowertokeepthenetworkrunning, industrialratesforpowershouldbeaffordable,provisionofrightofwayforfiberopticrolloutforexpandingthedigitalbaseinOdisha.Healsopointedtowardsneedforurgentreformsrelatedtotelecomtowerpolicyinthecontextofhavingmoreinvestmentinbroadband.

Shri Satish Pai, Deputy Managing Director, Hindalco, Aditya Birla Group drewattention toareaswhereGovernmentshouldfocuson:

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


• Railways, ports, roads sector because inadequate connectivity is increasing the lead time fordeliveryofgoodsfromminestoports,andadverselyimpactingtransportationcostalsoerodingcompetitiveadvantage.

• EaselandacquisitiontoattractFDI.

Shri Rahul Sharma, Chairman, Japan India Business Promotion Council saidinOdishalogisticscostisveryhighbecauseofpoorroadsandsaturationofrailcapacitywhichmakesevacuationofcargocostlyandtimeconsuming.

SESSION IV: STATE INVESTMENT PROMOTION SCHEME: JHARKHANDThis session was presided over by Shri K Ravi Kumar, Director (Industries), Government of Jharkhand.HereferredtosignificantimprovementineaseofdoingbusinessinJharkhand.AccordingtothereportreleasedbytheWorldBank,Jharkhandranked3rdintermsofeaseofdoingbusinessamongstthestatesofIndia.HehighlightedthestrengthofJharkhandasitishometorichnaturalresources.OnIncentivefronthesaidthat,GovernmentofJharkhandcansubscribeupto26%ofequityinselectelectronicsmanufacturingcluster,reimbursementofVAT,subsidyoncapitalinplantandmachinery,exemptionfrommanditax,subsidyuptoINR7Crforcreationofindustrialparks.

Shri Rahul Sharma, Chairman, Japan India Business Promotion Council


Speakingon themeShri Rajiv Mishra, Vice President, Samsung India said that earlier Jharkhandsufferedfrompolitical instabilitywhichdeterred investors.Withpolitical instability in theStateofJharkhandtheinvestorsperceptionandsentimentandeasilyimprove.howeverhadpoliticalproblemssinceinception.Investors’werethenhesitanttoinvestinanenvironmentwithpoliticaluncertainty.Landacquisitionremainsachallenge.

Shri Akhilesh Saurikhia, Team Leader, EY saidtherehasbeenachange inthemindsetof thoseinvolvedinadministeringgovernmentpolicies.TodaybothGovernmentapparatusandpersonnelentrustedwithpoliciesaremore investor friendly thananytime in thepast.He suggested thatGovernmentshould take initiativesandtalk to investorsona regularbasisandsolicit investors’opinionabouttheirneeds.

Shri Vijay Prakash Shah, Founder and Mentor of South Asia Forum for Energy Efficiency saidGovernmentpoliciesareinplacetoattractinvestmentsandboosteconomy.GovernmentjustneedstoworkoncreatingrightkindofpublicrelationstoenableinvestorstounderstandbetterwhattheGovernmenthastoofferintermsofpoliciesandincentives

Shri Jagdish Mitra, Head Strategy, Tech Mahindra said Jharkhand has untapped market. So,Governmentneedstoopenuptotheinvestors.GovernmentshouldfocusonopeningmorevocationalinstitutionforskilldevelopmentinIT&ITESindustryandcreatetechnologyinvestmentareaswhichallowsmallentrepreneurstocomeandsetupsoftwareandtechnologyrelatedbusiness.

Shri Sri Srinivasan, MD, Arthur D. Little saidGovernment should position Jharkhand to attractinvestorsgivenanenvironmentwhere statesarevying for investment.This calls forhassle freestreamlinedproceduresandwellstructuredincentivestoattractinvestment.

Shri Sri Srinivasan, Managing Director, Arthur D. Little alongwith other panelists


B2B Meeting during the GIIF


DAY 2 – SESSION-I MAKE IN INDIA - WAY FORWARD

ThissessionwaspresidedoverbyDr. Anoop K Pujari, Secretary, Ministry of Micro, Small and Medium Enterprises (MSME), Government of India highlightedthe initiativestakenbytheGovernmenttopromotetheMSMEsectorssuchas:

• Removal of clause related to prior work experience and amount of turnover in bidding forGovernmenttenders

• ChangeininvestmentlimitofMSME

• OnlineregistrationprocessthroughUdyogAadharMemorandum

Speakingon the themeDr. Guann Jhy Lee, Executive Director, Economic Division, Economic and Cultural Centre of Taiwan in India expressed the desire for a more open and innovative policyenvironment to attract FDI. This calls for change in themindset and doingaway with redundantprocedures.There shouldbeproper coordinationbetweenCentreandStates.Government shouldissues policies with clear content and stable message regarding taxation, simpler administrativeprocedures.

Dr. Anoop K Pujari, Secretary, Ministry of Micro, Small and Medium Enterprises (MSME), Government of India


Shri Mangal Dev, Senior Vice President, Rail Systems, Hitachi India said that technology importsthroughFDIneedtobenurturedbydevelopingdomesticsupplierswhocanprovidecomponents,rawmaterialandservices.Governmentshould focusonskilldevelopmentto facilitatetechnologyabsorption.LandisanessentialcomplimentaryassetforFDI.Thereisurgentneedtofacilitatequicklandacquisitionforforeigninvestorsforsettingupmanufacturingfacilities.

Shri Ravindra Sannareddy, MD and CEO, Sri City Pvt Ltd saidFDI inmanufacturingrequiresmoreland.ThiscallsforchangenLandAcquisitionAct.

Shri Ajay Nijhawan, Vice President, Model Economic Township Ltd, Reliance Industries Ltd welcomedseveralinitiativestakenbytheGovernmentinregardtoeaseofdoingbusiness,makeinIndia.Theseneedtobesupportedbyfasterimplementationandmonitoring.

Dr. Guann Jhy Lee, Executive Director, Economic Division, Economic and Cultural Centre of Taiwan in India


SESSION II: TRANSPORTATION AND INFRASTRUCTURE SECTORShri Arvind Kumar, Advisor, ASSOCHAM referredtosignificantcostsimposedbyinadequatetransportcapacity and seamless connectivity. This is increasingly reflected in long transittimeby road/rail,delayinevacuationofcargofromportsandhighturnaroundtimeofvesselsatports.Inadequaterailcapacityhasdistortedmodalmixoftransport infavorofroadwhichishighcostwithhighenergyconsumptionandemissionpertonnekmvis-à-visrail.

SpeakingonthethemeShri Harsh Dhingra, Chief Country Representative and Whole Time Director, Bombardier Indiasaidhugeinvestment isrequiredinrailways.Atthesametimethehighinterestrates areholding back investment.On theother hand, benefit of lower interest cost on externalborrowings is to someextentoffsetbyhigherhedgingcost tobeborneby the investors.Healsoemphasizedtheneedtoeasethelandacquisitiontofacilitatefasterdevelopmentoffreightcorridorsandindustrialtownships.

SESSION III: FINANCE FOR INFRASTRUCTURE DEVELOPMENTThissessionwaspresidedoverbyPrincipal Economist, Indian Resident Mission, Asian Development Bank (ADB), Ms. Johanna Boestel who reiteratedADB’s support to India in its initiativeof SmartCities,Urban Rejuvenation and Transformation for 500 cities, 24x7 electricity for all, Clean India,MakeinIndia,SkillIndia.Sheemphasizedtheneedforstablemacroenvironment,morelegalrightsforinvestors.IndianGovernmentneedstotakeinitiativestodeveloplocalcurrencybondmarkettoattractlargeamountofinvestmentsfromabroad.

Ms. Johanna Boestel, Principal Economist, Indian Resident Mission, Asian Development Bank (ADB)


Speaking on the themeMr. Qing Hong, CEO, ICBC, Mumbai said Indianmarket is being openedtomore andmore foreign investments.He said thatMake in India programmay face challengesduetononavailabilityof infrastructure,skilled labor,clearandstable taxationregime,protractedlandacquisitionprocedures.Governmentshould issue longtermbondstopromote investment ininfrastructuresector;allowfundinginRMBdenominatedbondsastheyentaillowercosts.

Shri Bikram Sen, CEO, Arthveda Fund Management Ltd highlightedthehugeinvestmentpotentialinmiddleincomeandlowincomehousing.Governmentshouldmakeplansforeasyavailabilityoffinanceateasyterms inhousingsectors.Hepointedtowardsproblemsbeingfacedbybuilders intimelycompletionofprojects.Governmentneedstolookintoregulatoryimpediments.

Mr. Yasunori Takeuchi, CEO, Standard Chartered Bank TokyosaidthatinIndiafinancingneedishugeso is the investment requirement. But investors arehesitant to invest alone.Government shouldtake steps to attract investment from bilateral/multilateral and foreign financial institutions. Tothisend,Governmentshould introduce investor friendly taxationregime,takesteps inaddressingadministrativeproblems,removingredtapecompletelyetc.

Mr. Qing Hong, CEO, Industrial and Commercial Bank of China (ICBC)


SESSION IV: STATE INVESTMENT PROMOTION SCHEME: KARNATAKAShri Manjunath Gouda, Resident Director, Government of Karnataka pointed out the uniquedistinctionofKarnatakaasthestatewhichproducesamixoftraditionalandhightechitemsincludingsilk,gold,coffee,sandalwoodandaerospace,biotechnologyandsoftware.HestatedGovernmentofKarnatakahasimprovedinvestmentclimatebyjudicioususeofincentivesavailableforinvestorssuchasstampdutyexemption,reimbursementofVAT,subsidizedpowertariff.

SpeakingonthisthemeShri Kalyan Chakrabarti, MD, Rising Straits Capitalhighlightedtheveryhighconcentrationofprivateequity ina fewmetros likeBangalorewhichneeds tobecorrected.Highconcentrationofinvestmentinafewcities/pocketsisstraininginfrastructure.

Shri K Nagaraj Naidu, Director, ITP, Ministry of External Affairs highlightedthe initiatives takenby theGovernment topromote investmentsuchas liberalizationofFDInorms,simplificationofprocedures,onlineclearancesforprojectsandfosteringaspiritofcompetitivefederalismamongstatestoattractinvestmenthasmadeIndiaanInvestmentattractingdestination.

Shri Bipin Kumar, CFO, Airbus India statedthatinvestorsarelookingforreadylandbank,uninterruptedsupply of power and water. In Karnataka, very big push is required from the Government oninfrastructureandskilldevelopment.

Mr. Yasunori Takeuchi, CEO, Standard Chartered Bank, Tokyo


IMPORTANT TAKEAWAYS FROM THE DELIBERATIONS AT ASSOCHAM’S FIRST GLOBAL INVESTORS’ INDIA FORUM

1. Positivestepsbythegovernmentsuchas increasingFDI investment limits inthepensionandinsurancesectors,100%FDIinrailwayinfrastructure(excludingoperations),fixedtimescheduleforFIPBpermissionscreationofInter-MinisterialCommitteesfocusedoninvestorsfromJapan(incollaborationwithMETI),USAetc.havehelpedcreatepositiveFDIsentimentsforIndia.Factorssuchasskilledmanpower,hightechnicaltalent,lowcostofHRacquisition,largedomesticmarketandstronggovernmentpoliciesaresomeofthekeyreasons,investorsvalued,whileinvestinginIndia.

2. InteractionofASSOCHAMwiththerepresentativesofforeignfirmsandinvestorsalsoprovidedinterestinginsights.ForeignInvestors’andbusinessleadersinparticularcontinuetobeinterestedinIndiaandenthusedbythelargemarketandhugeinvestmentopportunitiesintheinfrastructuresectorespeciallythesmartcityinitiative.Howevertheyseemtobestillin“waitandwatch”modegiventhetaxcomplexityandprotractedprocessoflegislativebusiness.However,someoftheforeigninvestorsvoicedtraditionalconcernsaboutthepaceofreforms,regulatoryimpedimentsconstrainingthegrowthofFDIintoIndia.Inaddition,concernsaboutreducedglobalgrowthandriseinUSinterestratescoulddampenFDIinflows.Someofthesuggestionsmadewere:

a. Removevariousconditionalityandrestrictionstomaketheforeigndirectinvestment(FDI)policymoreprogressiveandIndiaanattractiveinvestmentdestination.

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


b. FinalizeandexpeditereleaseofproposedliberalizedECBnormskeepinginviewtheoverallexternalpositionandmonetarystabilityofIndia.

3. NDAGovernmenthassoughttoreduceredtapeandincreasetheattractivenessofinvestinginIndiatoforeigncompaniesandinvestors.AlargevarietyofstepshavebeenannouncedbytheCentralGovernment.TheseneedtobeoperationalizedattheearliesttocutdownthecostofdoingbusinessinIndiaandinclude:

a) RolloutofG2Bportaltoserveasaone-stopshopfordeliveryofservicestotheinvestorsandaddressestheneedsofbusinessandindustryfrominceptionthroughtheentirelife–cycle;

b) Timebased services/procedures required tobecompliedby investors tobefilledonlinethroughunifiedformandchecklist.

4. Mostoftheinvestorswereawareoftheproblemsassociatedwithlandacquisitionforindustryandinfrastructure.Landbeingontheconcurrentlist(whichimpliesboththeStateandCentralGovernment) have powers to initiate laws/regulations provides ample room to the StateGovernmentstofindawayouttoeasetheproblemoflandacquisitionforlegitimateindustrialand infrastructure use through innovative schemes or appropriate amendments/legislations.Mostofthe investorsexpectamoreproactiveapproachonthepartofStatestoaddressthesensitiveissueoflandacquisition.

5. Investors’havestronglyfavored“landbank”schemesputinplacebysomeStatestoaddresstheconstraintsimposedbytheLandAcquisitionAct.

6. Investors’alsowelcomedsomeofthechangesmadeinlaborlawsforinstancebytheGovernmentofRajasthantoimpartmuchneededflexibilityinlaborlawsinanincreasinglycompetitivemarketenvironment.LaborbeingontheconcurrentlistoftheconstitutionoffersStateGovernmentslotofscopetolegislateandframelaborlaws/regulationstosuittheirneeds.

7. CentralGovernmentneedtodisseminatethebestpolicypracticesbeingadoptedbythevariousStateGovernments.Thiswillhelpinvestorstochooselocationfortheirinvestmentprojects.

8. CompetitivefederalismneedsbettercoordinationbetweentheCentralandStateGovernments.Incentivesbeingofferedbythestatestoattractinvestmentneedtobebackedbyavailabilityofsupportinginfrastructureandhumanskilldevelopment.

9. Investors’ applauded some of the initiatives undertaken by the Ministry of Micro, Small &MediumEnterprisesinoperationalizingtheeaseofdoingbusinesswhichcouldbeemulatedbytheotherdepartmentsatthecentralgovernmentandthestatelevelaswell.OneofthenotableinitiativeandsuccessofMSMEhasbeentheonlineregistrationprocessthroughUdyogAadharMemorandum.


AmbassadorofJapan,representatives’ofJICAandleadingJapanesefirmsinIndiaemphasizedthefollowingissues:

1. Needformoreclarityandcertaintyinincometaxlawshavingabearingoncorporateentitiesandseamlesstransportconnectivity.

2. Inparticular,JICArepresentativementionedthatJapanesecompanieswerekeentocollaboratewiththeirIndiancounterpartsontherailproject.Japanhasofferedtomeet80percentoftheMumbai-Ahmedabad505-kilometreHighSpeedRailcorridorcostestimatedatU.S.$15billionataninterestrateoflessthan1percent,onconditionthatIndiabuys30percentofequipment,includingthecoachesandlocomotives,fromJapanesefirms.JapanisofferingbothfundingandtechnologyfortheprojectEarlierJapan’sInternationalCooperationAgency(JICA)hadconductedajointfeasibilityReportforthiscorridor.

3. In Indiaonly1209 Japanese companiesareoperatingwhich ismuch lower than thenumberof 4,500 Japanese companies operating in Thailand, a much smaller economy. Of the 1209companiesoperatinginIndiain2014,136wereinDelhi,274inHaryana,207inMaharashtraand225inTamilnaduand182inKarnatakai.e.85%ofthecompanieswerelocatedinjust5statesofIndia.Thispointedtowardstheimportanceofinfrastructure(powerandtransportconnectivity)andskillsavailabilityasdecidingfactorsforJapaneseinvestment.InordertomakethespreadofJapaneseinvestmentmoreevenStateswillhavetofocusoninfrastructureanddevelopmentofappropriateskillsets.

4. JICArepresentativecautionedagainsttoomuchemphasisonlowestcost/priceofferindecidingthewinningbidforanyinfrastructureprojecttotheneglectofquality.Neglectofqualityandtechnicalaspectcouldprovecostlyintermsofhighermaintenancecostsovertheprojectcycle.

5. There is need to upgrade technical specifications of projects which are open to global competitive bidding. For instance projects related to sewagemanagement, water purification andmanyurbanservicesstillcarrytechnicalspecificationspertainingtoold/obsoletetechnologieswhicharenomoreinvogueinJapanorinotherdevelopedcountriesoreveninSouthEastAsia.TheseoutdatedspecificationsmakeitextremelydifficultforJapanesecompaniestoparticipateinthetenderingprocessdespitetheircostandtechnologicaladvantage.

6. Leasingorrentingassets(e.g.machineryorofficeequipment)cansavesubstantialinitialcostsofbuyingthemoutright.Itoffershugepotentialintransportation(railways,roadconstructionequipment,mining etc). It has several advantages which inter alia include: access to a highstandard of equipment that youmight not have been able to afford otherwise; the leasingcompanycarriestherisksiftheequipmentbreaksdown;aslongasyoumakeregularrepaymentsfortheperiodofthelease,theagreementcan’tbecancelled.

7. Need for fresh approach towards reviving stressed/stranded infrastructure projects in thehighwaysector. Insteadofhanding thoseover toasset reconstructioncompaniesorfinancialinstitutionholdingamajoritystakeintermsoflendingexposurethesecouldbeassignedtoa


newmanagementorfirmswithexperienceofmanaging suchprojects tonurture thembacktorecovery.Inaddition,thereisurgentneedtoinjectbothnewtechnologyandmanagementtechniquestoreducethecostsofoperation.

8. Expand the ambit of vocational training/disciplines which are restricted to 400 trades as ofnow.

9. Regulatoryinstitutionsneedtohaverepresentationfromallstakeholdersandneedtostrikearightbalancebetweenregulationanddevelopmentofthesectortheyareentrustedtoregulate.

10. Launchentrepreneurshipandinnovationincubationprogram,withadefinedmandatetopromoteentrepreneurshipinIndiathroughanewinitiativecalled“FIVE”(Funding,Incubation,Vesting,andExpansion)framework.Thisinitiativewillactasanurseryforbuddingentrepreneurswithinnovativeideaswhichtraditionalfinancialinstitutionswouldbereluctanttofinance.

11. InIndiaittakesmuchlongerforFDItofructifywhencomparedtoThailand,Malaysiainparticular.OneofthereasonsisittakeslongertoestablishandnurturesupplychainnetworkinIndia.Quiteoften the foreign investorhas toabsorbpartof thecost.This shortcomingcanbeovercomethroughpartnershipamongstthegovernment,Indianprivatesectorandtheforeigninvestor.Thiscallsforalongtermstrategyencompassingskillformation,clusterdevelopmentandsupportinginfrastructure.

12. Lack of inadequate and inefficient transport capacity and seamless connectivity imposessignificantcosts intermsofhighlogisticscostsanderodescompetitivenessof Indianexports.Thisisincreasinglyreflectedinlongtransittimebyroad/rail,delayinevacuationofcargofromportsandhighturnaroundtimeofvesselsatports.Inadequaterailcapacityhasdistortedmodalmixoftransportinfavorofroadwhichishighcostwithhighenergyconsumptionandemissionpertonnekmvis-à-visrail.Thereisneedtodeveloplargelogisticsparkandintermodalhubstoprovideseamlessconnectivity.Alsothecoastalshippingneedstobepromotedbyincentivizingmovementofbulkcargobyinlandwaterways.

13. Need to convert Global Investors’ India Forum from an event to an organization dedicated to the cause of promoting FDI into India.Theorganizationshouldbeleanandstorehouseofrelevant informationpertaining to India’s investmentpolicies. It should serveas thebridgebetweenforeigninvestors,foreignchambersofcommerce,ASSOCHAM’sforeignbranchesononesideandvariousagenciesoftheGovernmentof India involved inprocessingof foreigninvestmentproposalsontheother.Ithastowork24*7.Thismayneedaninteractiveinternetmedium.Itsstructureandorganizationaldetailscouldbeworkedoutafterdeliberationswithstakeholders.

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FOREIGN DIRECT INVESTMENT (FDI) STATUS(Source: DIPP and RBI Website)


ASSOCHAM : THE KNOWLEDGE ARCHITECT OF CORPORATE INDIAEVOLUTION OF VALUE CREATOR:ASSOCHAMinitiateditsendeavourofvaluecreationforIndianindustryin1920.Havinginitsfoldmorethan400ChambersandTradeAssociations,andservingmorethan4,50,000membersfromalloverIndia.IthaswitnessedupswingsaswellasupheavalsofIndianEconomy,andcontributedsignificantlybyplayingacatalyticroleinshapinguptheTrade,CommerceandIndustrialenvironmentofthecountry.Today,ASSOCHAMhasemergedasthefountainheadofKnowledgeforIndianindustry,whichisallsettoredefinethedynamicsofgrowthanddevelopmentinthetechnologydrivencyberageof‘KnowledgeBasedEconomy’.ASSOCHAMisseenasaforceful,proactive,forwardlookinginstitutionequippingitselftomeettheaspirationsofcorporateIndiainthenewworldofbusiness.ASSOCHAMisworkingtowardscreatingaconduciveenvironmentofIndiabusinesstocompeteglobally.ASSOCHAMderivesitsstrengthfromitsPromoterChambersandotherIndustry/RegionalChambers/Associationsspreadalloverthecountry.VISION: EmpowerIndianenterprisebyinculcatingknowledgethatwillbethecatalystofgrowthinthebarrierlesstechnologydrivenglobalmarket andhelp themupscale, alignandemergeas formidableplayer in respectivebusinesssegments.MISSION: AsarepresentativeorganofCorporateIndia,ASSOCHAMarticulatesthegenuine,legitimateneedsandinterestsofitsmembers.Itsmissionistoimpactthepolicyandlegislativeenvironmentsoastofosterbalancedeconomic,industrialandsocialdevelopment.Webelieveeducation,IT,BT,Health,CorporateSocialresponsibilityandenvironmenttobethecriticalsuccessfactors.MEMBERS – OUR STRENGTH: ASSOCHAMrepresentstheinterestsofmorethan4,50,000directandindirectmembersacrossthecountry.Throughitsheterogeneousmembership,ASSOCHAMcombinestheentrepreneurialspiritandbusinessacumenofownerswithmanagementskillsandexpertiseofprofessionalstosetitselfapartasaChamberwithadifference.Currently,ASSOCHAMhasmorethan100NationalCouncilscoveringtheentiregamutofeconomicactivitiesinIndia.IthasbeenespeciallyacknowledgedasasignificantvoiceofIndianindustryinthefieldofCorporateSocialResponsibility, Environment& Safety, HR& Labour Affairs, Corporate Governance, Information Technology,Biotechnology, Telecom, Banking& Finance, Company Law, Corporate Finance, Economic and InternationalAffairs, Mergers & Acquisitions, Tourism, Civil Aviation, Infrastructure, Energy & Power, Education, LegalReforms,RealEstateandRuralDevelopment,CompetencyBuilding&SkillDevelopmenttomentionafew.INSIGHT INTO ‘NEw BUSINESS MODELS’: ASSOCHAMhasbeenasignificantcontributoryfactorintheemergenceofnew-ageIndianCorporates,characterizedbyanewmindsetandglobalambitionfordominatingtheinternationalbusiness. The Chamber has addressed itself to the key areas like India as InvestmentDestination, AchievingInternationalCompetitiveness,PromotingInternationalTrade,CorporateStrategiesforEnhancingStakeholdersValue,GovernmentPoliciesinsustainingIndia’sDevelopment,InfrastructureDevelopmentforenhancingIndia’sCompetitiveness,BuildingIndianMNCs,RoleofFinancialSectortheCatalystforIndia’sTransformation.ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of Commerce &Industry,Mumbai;CochinChambersofCommerce&Industry,Cochin:IndianMerchant’sChamber,Mumbai;TheMadras Chamber of Commerce and Industry, Chennai; PHDChamber of Commerce and Industry,NewDelhi.Together,wecanmakeasignificantdifferencetotheburdenthatournationcarriesandbringinabright,newtomorrowforournation.

D. S. Rawat(Secretary General)

Ajay Sharma(Senior Director)

GLOBAL INVESTORS’ INDIA FORUMC/o The Associated Chambers of Commerce and Industry of India

ASSOCHAM Corporate Office: 5,SardarPatelMarg,Chanakyapuri,NewDelhi-110021Tel:011-46550555(HuntingLine)•Fax:011-23017008/9•E-mail:[email protected]•Web:www.assocham.org

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