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 here on Friday.
The Japanese Inc has 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 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.
Regarding national taxes, an Act on General Rules for National Taxes should be established, and similar state legislation should be enacted in each state for regional taxation, it further recommended.
The joint forum report referred to projects like the Delhi-Mumbai Industrial Corridor (DMIC) and the Chennai-Bengaluru Industrial Corridor (CBIC) as symbols of the cooperation between India and Japan and called for the continued advancement of infrastructure development, including roads, railways, ports, airports, electric power and smart grids, water treatment, and industrial complexes.
At the same time, it said, “Business leaders of Japan and India, from the stand point of promotion of development of high quality infrastructure through public private partnership, asks Indian government to implement the following:
“Introduction and expanded use of a comprehensive evaluation system in tendering process to reduce life cycle cost and to correctly evaluate technological value; rationalisation and optimisation of risk and role sharing between public and private sectors in public private partnership (PPPs) projects including provision of government guarantees; allowing of one company bids when deemed necessary; and implementation of tenders in a whole and thorough way per each project.”
Welcoming the civil nuclear cooperation agreement, the joint business forum said stronger engagement is needed between Japan and India in high-technology areas, based on an agreement between the two countries in the area of defence and security.
“Strengthening of India-Japan economic cooperation through Japan-India Special Strategic and Global Partnership must be implemented based on free and open trade and investment framework. The result would enhance the economy of Asia and Pacific region, which would in turn contribute toward sustainable growth of the world economy,” the report said.
“Business leaders of India and Japan recognise that the Regional Comprehensive Economic Partnership (RCEP) would contribute toward expansion of regional production network and strengthen supply chains through not only liberalisation of trade and investment but also through integration of rules of origin and introduction of regional cumulative rules,” it added.
The forum said these measures would contribute toward fulfillment of Modi’s “Make in India” policy.
“For this purpose, RCEP should be concluded swiftly, in a comprehensive manner with setting high standards. Business leaders of the two countries agreed to continue in taking joint initiatives toward this end,” it said. (agencies)
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