Japanese firms seek easing of restrictions on funding in India
Japanese industry has sought early passage of the amended Land Acquisition Bill and further relaxation of “restrictions” on foreign financing in certain sectors
Tokyo: Amid India’s efforts to woo investors, Japanese industry has sought early passage of the amended Land Acquisition Bill and further relaxation of “restrictions” on foreign financing in certain sectors to ensure “free and smooth” corporate business activity by its companies in India.
The recommendations have been made in a joint report of ‘India-Japan Business Leaders Forum’ 2016 which was presented to Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe in Tokyo on Friday.
The Japanese industries have also suggested reforms in the tendering processes in the infrastructure sector in India by introducing and expanding use of a comprehensive evaluation system, allowing one company bids and some other measures.
“The business communities of India and Japan will continue to cooperate in strategic areas such as the promotion of economic partnerships, improvement of the business environment, and infrastructure development, and on issues of a global scale. In so doing, they will cooperate with the governments of both nations from a business standpoint to ensure that the Indian and Japanese economies will grow together and continue to act as growth engines in the global economy,” the report said.
In its recommendations, the report said, “In India, free and smooth corporate business activity, including by Japanese companies, requires the development of systems for the prompt and smooth introduction of a Goods and Services Tax (GST) and the steady implementation of the Agreement between Japan and the Republic of India on Social Security. In addition, the following are also essential: the early passage of a bill for amendment of land acquisition laws; the organisation, streamlining and international conformity of permanent establishment (PE) taxation, transfer pricing taxation, standards and certification systems, and intellectual property systems; further relaxation of restrictions on foreign investment and financing in the distribution sector and other sectors; and appropriate levels of service taxes in industrial complexes, etc.”
The report added that the business leaders of the two countries “strongly urge the Indian government to step up its approaches on these issues and the Japanese government to cooperate in their improvement”.
To ensure “fairness, transparency, and predictability” in administrative procedures in India, they called for the establishment of an Administrative Procedure Act and the simplification and expedition of the various procedures. The Act would provide for common rules concerning procedures for penalties, etc by administrative bodies and the procedure for establishing administrative orders, said the forum in its report. PTI