The Parliamentary panel on Commerce headed by YSR Congress Party leader V. Vijayasai Reddy has asked the central government to learn from policy changes made by countries like Vietnam, Taiwan and Thailand to attract companies that are shifting their base from China. The committee also suggested that India sign free trade agreements in a selective manner for maximum benefit.
The observations were made in the 158th report of Department Related Parliamentary Standing Committee on Commerce on 'Attracting Investment in post-Covid Economy: Challenges and Opportunities for India' tabled in both houses of the Parliament on February 10.
The committee looked specifically into the challenges faced by sectors like automobile, steel, toys manufacturing, pharmaceuticals, medical devices, electronic goods and solar industry. India's huge trade deficit with China was flagged in the report. Production Linked Incentive scheme, Phased Manufacturing Programme and various Ease of Doing Business measures taken by the government was looked at.
Expressing deep concerns over India's poor industrial performance, the committee said a vibrant and healthy industrial performance is critical to India's economic recovery from the adverse impact of COVID-19 pandemic.
The panel said that the main challenges faced by the country presently are - administrative and regulatory hurdles, inadequate and costly credit facility, tedious land acquisition procedure, inadequate infrastructure facilities, high logistics cost and large unorganised manufacturing sector, among others.
It welcomed the policy changes and the incentive schemes brought in by the government to overcome these challenges but said the key is successful implementation of reforms through seamless co-ordination between various ministries and departments of the government of India as well as the state governments.
"There is an imperative need to sensitise the State administration towards the importance of investment and business and its role in spurring the economic growth of the country. It is important to understand that a number of countries are competing to attract foreign investors and reorienting their capacities and strategies aimed at reduction of imports and optimising export potential", the committee said.
A proactive approach of the government combined with trust and credibility to meet the commitments and to fulfill the promises will be a crucial factor to attract investment, the committee pointed out. It wanted the Department for Promotion of Industry and Internal Trade to play a pivotal role in taking the country forward on its path towards self-reliance, creating conducive ease of doing business environment and capitalising on the investment opportunities coming into India.