HYDERABAD: A strong pro-investment policy, world class infrastructure, labour reforms and lower tariffs are what India requires to attract greater FDI and tackle the threat China poses, the speakers said Tuesday evening. They also said there was no need for India to have a special set of policies for foreign investors and that it should instead have pro-growth domestic policies and infrastructure in place for investment to flow in. They suggested that India build some of its cities as FDI destinations as China has done. Speaking on "China-India: where does the foreign investment go?" they said India had the potential to halt the Chinese juggernaut by emerging as the world's manufacturing destination. They attributed China's extraordinary success to a stable political environment, a strong will and commitment of the government to carry out reforms and low tariffs. Summing up the proceedings Jairam Ramesh, secretary of the All India Congress Committee, said India had nothing to fear from China as it had tremendous entrepreneurial skills. He pointed out that many Indian companies were operating successfully in China. "But some of us (Indians) feel that we are god's gift to humanity, we have 3,000 years of history and that we have all answers in a book to all the problems we face," he said and warned against such an approach. David Kilgour, secretary of state (Asia Pacific), Canada, said during the last 10 years India received total FDI worth $30 billion while China for the same period received an awesome $300 billion. China may soon displace the U.S as the number one FDI destination in the world. He pointed out that while China was the fourth largest trading partner of Canada, India held the 19th position. During 2001 the two-way trade between China and Canada was $12 billion while the same between India and Canada was $1.3 billion. Canada invested $600 million in China but only $200 million in India. "China is a model that should be duplicated by India," he said. He, however, said some obstacles remained in investing in China such as theft of intellectual property rights and corruption. According to Transparency International, China ranked 59th in a list 102 corrupt countries. But the situation of IPR theft was worse in India which ranked 71st in the list. Howard Chao, head, Asia Pacific, O'Melveny & Myers, China, said overseas Chinese were a major factor in FDI inflows into China. "Non-Resident Indians can be better harnessed for FDI flows into India," he said. According to him, 36 percent of FDI in China comes from Hong Kong, 12 percent from Virgin Islands and 10.4 percent from the U.S. He identified the strengthening of the legal system, the setting up of Special Economic Zones, tax incentives, liberalised investment approval regime, duty free processing regimes for exports, and flexible labour regime as key factors of China's astounding success since 1978, when it first opened the doors of its economy.
Source: IANS