New Delhi: India should ensure policy and judicial stability that will help counter the negative sentiments of late about investment climate in the country and ease flow of foreign funds, says Germany’s Ambassador to India, Michael Steiner.
“India has to show that it is willing to take policy initiatives to protect foreign investments in the country. Currently, there is a lot of speculations going about the Indian economy,” Steiner told IANS in an exclusive interview.
The envoy’s suggestion is significant when seen in the context of retrospective taxation measures and overseas telecommunication companies, which had lost their 2G licences following a Supreme Court judgement, slapping notices on the government citing a breach of the bilateral investment protection agreement (Bipa).
Bipas are meant to raise the comfort level of the investors by assuring a minimum standard of treatment in all matters and provide for justifiability of disputes with the host country.
India has signed Bipas with 82 countries, of which 72 have come into force.
FTA with EU
Steiner also said the negativity surrounding the investment environment in India can be solved with an early agreement on the free trade agreement (FTA) between India and the European Union (EU).
“The FTA is not just about one sector or industry but includes a very vast area of economy of both India and the EU,” he said.
“I expect the FTA to come into effect soon if the political will on both sides is strong enough to reach an agreement.”
On Indo-German trade, Steiner said he is quite confident it will reach the €20 billion (Dh90.3 billion) mark by the end of 2012, despite the current Eurozone crisis.
“Our current trade is on an upswing. Many German companies are operating in India and doing good, and this list of companies does not necessarily include automobile but also high-tech companies.”
German auto majors
Major German automobile manufacturers like Audi, BMW, Mercedes, and Volkswagen Group are present in the country. They have achieved healthy growth numbers, while the rest of the Indian auto industry faced a downturn.
Apart from automobiles, technology company Siemens, airline major Lufthansa, and many other companies are present in the Indian market.
The latest to enter the Indian market are the wine makers who are trying to promote a select range of white and red wines, which the ambassador claims goes best with spicy Indian food.
Asked about new areas of cooperation between the two countries, Steiner referred to renewable energy and vocational training.
“Renewable energy sources, urban infrastructure planning, new technologies in the area of medicine, education have now become major upcoming areas, especially vocational training, important for millions of India’s youth today.”