Press Information Bureau
Government of India
Ministry of Commerce & Industry
27-September-2005 15:9 IST
India the best investment destination, Kamal Nath tells us Small and Medium enterprises

India is the best destination for foreign direct investment (FDI) and joint ventures, Shri Kamal Nath, Union Minister of Commerce & Industry, told an audience of US investors at the Focus India Show in Chicago today. “The Indian economy is very well suited to the small and medium American companies which may have difficulty in operating in the saturated western markets. With the vast technical and managerial skills available in India, Indian and American SMEs can join hands both as complementary and supplementary partners, to cater to not only the vast Indian market but also the untapped markets in Asia and Africa”, he said.

Elaborating on the strengths of India as an investment destination, Shri Kamal Nath underlined that India had emerged as an across the board low cost base, attractive enough to multinationals to relocate in the country. “More than one hundred of the Fortune 500 companies have a presence in India, as compared to only 33 in China. But it is not the Fortune 500 Companies that I have come to Chicago to seek. Chicago is one of the most important economic centers of the mid-West agriculture belt. There are a huge number of SMEs (small and medium enterprises) here. You have a strength in agriculture and a strength in industry. The potential for identifying appropriate synergies is tremendous”, he stressed.

Reiterating that India promises high return on investments, Shri Kamal Nath said that repatriation of profits was freely permitted, while according to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) a few months ago, 70% of foreign investors were making profits and another 12% were breaking even. These figures would have since improved further he said, adding that FDI policies in India were among the most liberal and attractive in emerging economies.

He listed out the policy initiatives taken by the government in specific sectors such as telecom, ports, airports, railways, roads, energy and construction development with a view to improving competitiveness of the Indian economy. Further, lucrative investment opportunities were being offered to investors though tax incentives and customs duty concessions for import of plant and machinery needed for the projects. An Special Economic Zone (SEZ) Act was also in place to facilitate this process.

The Minister also sought to dispel the impression that India was lagging behind in manufacturing. “This is far from the truth. Of course, we are good in Services & Business Process Outsourcing, but that does not mean that we lag behind in manufacturing skills. In sectors like auto-components, chemicals, apparels, pharmaceuticals and jewellery we can match the best in the world. More than a dozen Indian companies are among the top five global producers in their product categories. It is to showcase our manufacturing that we have come to Chicago”, he said.

He said in FDI India was looking for greenfield investment – investment that would create employment and bring in technology and not just investment that would replace Indian capital.

The Minister is currently leading a high-powered business delegation to the US for the Focus India show – Indo-US Business Partnership being held in Chicago from 27-29 September, 2005, organised by FICCI and the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry and supported by the Consul General of India/Chicago. The purpose of the delegation is to discuss FDI, joint ventures and tie-ups between Indian and US companies for exports to third countries.