Indian Prime Minister Narendra Modi yesterday pledged to slash red tape and harness the benefits of a huge young population, as he launched a campaign to attract global business to manufacture in India.
India’s business-friendly new leader wants to revive his country’s flagging economic fortunes by invigorating a manufacturing sector long eclipsed by that of neighboring China.
“We don’t need to invite the world to India; they are ready to come. We just need to give them our address,” Modi said at the launch of his “Make in India” campaign.
Photo: AFP
“India is the only country in the world that has the power of democracy, demographic dividend and demand,” he said, adding that the nation’s young people stood to benefit from manufacturing growth.
Modi’s right-wing Bharatiya Janata Party swept to power in May on a mandate to revive the economy, which is going through its worst slowdown in two decades.
The government has already relaxed rules for foreign investors, eager to create jobs for the millions of Indians who enter the employment market each year.
However, any company seeking to do business still has to contend with byzantine regulations and a stringent tax regime.
Modi said he had been “pained” to hear stories of businesses abandoning India because of an unfavorable business climate.
“I asked my staff: ‘Why are government forms so lengthy?’ And there was no reason,” Modi told business leaders, including Reliance Industries head Mukesh Ambani, India’s richest man.
Indian Minister of Commerce and Industry Nirmala Sitharaman said there was “huge untapped potential” in India for manufacturing, which accounts for just 15 percent of GDP, far less than in many other Asian nations.
“India has long been associated, unfortunately, with red-tapism and cumbersome rules and regulations. We are conscious of such perceptions,” Sitharaman said.
“We want to change that. Red tape will be replaced by the proverbial red carpet,” she said.
The World Bank recently placed India 134th among 189 economies in its ease of doing business report, while China ranked 96th.
British mobile giant Vodafone is locked in a US$2.4 billion tax row with the Indian government, while Finnish company Nokia had its plant in India seized over a tax dispute.
Kenichi Ayukawa, head of Indian car manufacturer Maruti Suzuki, said India had the potential to be a world leader in the sector, but was being held back by red tape and other issues.
“Costs of production in India increase because of various government policies, procedures, regulations and the way some of the laws are implemented,” he said at the launch, adding he was confident such barriers to growth could now be removed.
Modi launched the campaign hours before he was due to fly to the US, where he will meet heads of businesses including Google and PepsiCo on an official visit heavily focused on attracting investment.
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