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October - November 2009
Kamal Nath woos Foreign Investors in Zurich – the Banking Capital of the World
Addressing a strong gathering of investors, developers and financial institutions in Zurich last month, Minister of Road Transport and Highways Mr. Kamal Nath presented the emerging opportunities in the road sector in India. He stated that India as a nation is determined to build a comprehensive high quality infrastructure in the country. The next decade would belong to infrastructure sector, as the last decade had been the decade of IT. This meeting was organised by the Confederation of Indian Industry (CII), in partnership with ICICI Bank and JM Financials.
Elaborating on the new vision on road sector, he said that Government is committed to increase the pace of highway development to 20 kms per day. This would unleash huge business and investment opportunities, amounting to US$ 60 billion over the next 3-4 years. In addition, this would lead to an inclusive growth and provide connectivity to all stakeholders in socio-economic development. Inviting investors to be a partner in building road infrastructure in the country, he said that out of total investment of US$ 60 billion, US$ 40 billion are expected to come from private sector.
To handle the road development programme of this magnitude, he specifically mentioned some of the initiatives that Government of India is taking to build capacity of National Highways Authority of India. He also highlighted the need to expand the capacity of construction and consulting firms.
Responding to some of the queries, he said that the Government is more than willing to review the model concession agreement to allay the concerns of investors and developments and provide them much needed comforts. Clause for termination during construction was also highlighted as a major concern by the lending institutions who are interested to invest in the Indian Roads Sector.
Road development should not be merely viewed as asset creation – it has to have service orientation. There is a need to structure the road development programme in such a fashion so as to provide maximum amenities and safety to users, he added.
Investors and developers who attended the meeting greatly appreciated the efforts, commitment and the policy structure that has been put in place to attract foreign investments in the road sector in India. Mr. Brahm Dutt, Secretary, Ministry of Road Transport & Highways, briefed the investors on the major policy initiatives taken by the government like MCA, RFQ, RFP, Standards Manual and the definition of a Minimum Project Size being 100 kms and Rs. 5000 crores.
During his visit to Zurich, the Minister also addressed a Round Table on Road Sector, organised by World Economic Forum. He had a frank and free discussion with investors on some of the challenges including long term debt financing, realistic costing of projects with market rates instead of schedule of rates, dispute resolution, bidding parameters, sound DPR’s and Feasibility Reports and the need for dedicated road contractors. All clearances should be taken together, instead of separately, as in the present case, so that construction could start quickly.
The Indian delegation was represented by Mr. Brahm Dutt, Secretary, Ministry of Road Transport and Highways, Govt. of India; Mr. Brijeshwar Singh, Chairman, NHAI; Mr. Chandrajit Banerjee, Director Genearl-CII; Mr. Ajit Gulabchand, CMD-HCC Ltd., Mr. Atul Punj, Chairman, Punj Lloyd Limited; Mr. Vinayak Chatterjee, Chairman, Feedback Ventures Pvt. Ltd.
Foreign Trade Policy Aimed at Diversifying Indian Exports
Government committed to reduce Transaction Costs for Exporters: Mr. Anand Sharma
The new Foreign Trade Policy 2009-14, attempts to diversify India’s export products and markets, according to Mr. Anand Sharma, Union Minister for Commerce & Industry, Government of India. He said the new policy has been unveiled in a very challenging backdrop and added that though targets set in the policy are conservative, they are pragmatic and realistic.
Mr. Sharma was speaking at an Interactive Session on the Foreign Trade Policy [2009-14], organised by the Confederation of Indian Industry (CII). He said, the government had tried to use the available resources judiciously to focus on labour-intensive sectors. These sectors would help “create more jobs”, while generating more resources in the economy, added Mr. Sharma.
Expansion of Market Linked Focus Products Scheme (MLFPS) to 13 new markets and 1700 products was the highlight of the new policy, opined Mr. Sharma. He also expressed hope that the new policy would help exporters to tide over the current slowdown.
He was of the view that at a time when traditional markets for Indian exporters are in a recession, it is important to engage with other countries and diversify exports. At the time of crisis, it may be convenient to turn protectionist, however it may not be the right choice, as it carries the risk of deepening the recession, added Mr. Sharma.
Mr. Sharma said, the Government was determined to reduce transaction costs for Indian exporters. The current policy has already reduced the application fees for exporters and the government would work to simplify export policies and procedures. “Electronic trade is important and will be looked at in a time bound manner”, added Mr. Sharma.
Earlier, in his welcome remarks, Mr. Chandrajit Banerjee, Director General, CII complimented Mr. Sharma for his leadership and for unveiling “realistic, transparent, innovative and achievable Foreign Trade Policy”.
Dr. Rahul Khullar, Secretary, Department of Commerce, said the new Foreign Trade Policy is realistic and not overambitious and added that diversification of Indian exports was the overall theme of the policy.
Mr. Sunil Kant Munjal, ex-president CII, expressed the need of establishing an overarching umbrella organisation to promote trade and investment in India. He said the simplification of process and procedures in the policy was timely and added that industry would work closely with the Government to achieve targets set in the policy.
Mr. Sanjay Budhia, Chairman, CII National Committee on Trade thanked Mr. Sharma for coming out with an ambitious and long-term vision in the Foreign Trade Policy.