Promising to usher in further tax reforms in the next Budget and to bring down tariffs in India to ASEAN levels, Prime Minister Manmohan Singh has assured multinational corporations that an independent Petroleum Regulatory Authority would be set up to provide a level playing field to them in the oil sector.
At an interaction with chief executive officers of European and Indian corporates on Monday night, Singh also made it clear that India will adhere to all the commitments already at the World Trade Organisation including on Trade Related Intellectual Property Rights on which a legislation will be brought before Parliament soon.
"I recognise that whoever comes to invest in India is entitled to expect a level-playing field. The government is in fact in the process of doing that.
"An independent and credible Petroleum Regulatory Authority will be set up," he told Jeroen van der Veer, Chairman, Board of Management, Royal Dutch Shell, who is slated to take over as chairman of the whole Anglo-Dutch Shell Group after the forthcoming merger of the UK and Dutch branches, the first non-British Chairman of the combined firm.
Shell has extensive investments in India and is putting another $1.3 billion in port development and gas-based industries in Gujarat, plus an entry into the petroleum retail business.
At the interaction, van der Veer had specifically suggested creation of a level playing field for multinational corporations in the oil sector.
The prime minister said India was concerned that at a time when it was accepting the logic of globalisation the argument for protection was re-emerging in the West and expressed the hope that this trend would be reversed.
"The government will do all it takes to integrate India into
the evolving global economy. We are accepting the implications of the multilateral trading system," he said.
Singh said India accepted in its totality liberalization and the logic of greater interaction from abroad. "We want to take full advantage of the process of globalisation to wipe out poverty at home," he said.
Recalling that in the last few years India had grown at 6 per cent, Singh said to achieve a growth rate of 7-8 per cent India has to accelerate the inflow of foreign investment.
He recognised that investors both at home and those abroad viewed investment, bureaucracy, corruption and tax system as constraints. "I urge you to seize the opportunity," he told them.
The prime minister said India and Europe had cultural familiarity but the country has not taken full advantage of the WTO system and global methods.
Recounting the economic reforms initiated in 1991 when he was the Finance Minister, he said India's destiny lay in embracing globalisation and political parties across the spectrum had emphasised the need of continuing the reforms.
Maintaining that on a conservative estimate India needed $150 billion, the prime minister said massive investment was required in infrastructure and therefore great possibilities were open for European skills and capital.
He told the industrialists that there was scope for engineering, manufacturing and financial enterprises to participate in this opportunity and that the government would work towards developing viable attractive public private partnerships and investment opportunities in infrastructure.
Singh said he headed a committee on infrastructure to eliminate policy bottlenecks and the government has also established an investment commission to promote FDI and smooth out impediments for investors.
He promised a stable incrementalist FDI policy which will actively seek investment, particularly in high technology, manufacturing and export sectors. The National Common Minimum Programme of the coalition at the Centre was very investment-friendly, he added.
Saying that India attached high priority and a high degree of importance to attracting investment from other lands, the prime minister made it clear that FDI was a source not just of capital but also of technology, managerial skills and provided entry into global supply and production chains.
Pharmaceutical and biotech, manufacturing including automobiles, auto-components, engineering goods, steel and metals and agro processing were the other areas that were waiting for exploitation, Singh said.
Among the 30 European and Indian investors who attended the interaction were Jacqus Dunogue, President of Alcatel Europe, France, A M Kloosterman, Chairman ABN Amro Bank, the Netherlands, E F C Boyer de la Goroday, ING group, Hakan Yuksel, SAP German, Dominique, Alstom Transport, France, Sunil Kumar Munjal, CII President, Yogi Deveshwar, ITC, Rajesh Hukku, Chairman, iflex solutions and Kanwar, FICCI.
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