French President Francois Hollande's visit to India has brought in an investment of over $10 billion in India in a span of the next five years. “Over the last five years, French companies have invested more than $1 billion per year in India. We estimate that they will continue to invest at least $10 billion over the next five yeas,” said French Finance Minister Michel Sapin, in a speech to the Federation of Indian Chambers of Commerce and Industry in New Delhi.
Indian Prime Minister Narendra Modi announced that the controversial retrospective tax, which set off a scare among foreign investors after it was introduced in 2012 by the then UPA government was “a matter of past” and “a chapter (that) will not be opened again”. Addressing business leaders of both the countries, and the French President, Modi said his government would ensure that foreign investors were clear about tax systems that would prevail in India over the next 15 years. “Retrospective tax is a matter of past. That chapter will not be opened again. We are ensuring that neither this government nor future governments can open this chapter.” The PM said his government was working towards a stable and predictive taxation system in the country. “Whosoever makes investment in the country should know about the taxation system in the country over the next 5 years, 10 years, 15 years,” he said.
Calling both the countries natural partners, Modi said. “It is like made for each other. What you have is our requirement and what you need is the market which we have.” In addition, India also offered a low cost manufacturing destination with an abundance of skilled manpower. He invited French companies to make in India, especially those in the defence sector. “India wants to enter the field of defence manufacturing... I assure French companies present here, especially in the field of defence manufacturing, that we can do a lot in the area of defence manufacturing.” India had seen a 40 per cent increase in foreign direct investments and established itself as an important destination for foreign capital, Modi said, pointing out that the country's 'Ease of Doing Business' ranking had improved by 12 points after his government took over.
“The inflow of 40 per cent FDI in short period of time is proof that the world has recognised India as an important decision. We are working towards improving quality of life. We are working on good governance. These are the two initiatives that the world is attracted towards,” Modi said, adding, “Ultimately, good governance is the essence of our efforts.” Hollande said there were many sectors in which France could help India make progress, including rail transport, maritime transport, Information Technology, space and defence. He said his country would be pushing for investments worth $ 1 billion per year. Referring to the Chinese growth of 9 per cent per year, he said the level of growth of Chinese economy has slowed down. “There can be many reasons for this. India is an economy which is growing fast and France wants to invest in India. We will be pushing investments worth one billion US dollars per year,” Hollande said. He also offered help to manage the rapid growth of urban India.
