Singapore: India will have to open its market to all investors, eliminate exchange control, remove subsidies and create certainty on tax issues, two leading investments experts here said.
Though India is a country having a huge market with business potential, Jim Rogers, a renowned American businessman and investor, pointed out that it still remains a challenge to work in India as investors widely perceive the country having "an anti-business climate".
"Open the market to all investors, eliminate exchange controls, dismantle protectionism and remove subsidies. These would make big differences in India," said Rogers told PTI.
The investors would want India to create certainty on tax issues, said Seth R Freeman, Chief Executive Officer of New York-based EM Capital Management, a global investment consultancy.
Rogers, Chairman of Rogers Holdings, hoped Prime Minister Narendra Modi, having brought success to Gujarat State, would be able to do the same for the country.
"I do not believe foreign investors have significant issues about setting up new subsidiaries in India. It is fairly inexpensive to have lawyers organise a new company, obtain necessary approvals, tax-related registrations, appoint directors, open bank accounts," said Freeman whose company has registered with the Security and Exchange Board of India since 2007.
In spite of being a leading democracy, foreign investors have long viewed India's "country risks" to be relatively high, according to Freeman.
He pointed out that China, comparatively, was rated to be a better risk-adjusted place despite one-party rule in Beijing.
Adding to the investors' risk concern are a number of high-profile tax cases in India involving multi-national corporations, including the widely publicised Vodafone case.
But these days adding to these cases were recent issues like the company act sections 396 and 397 which according to recent media reports were being considered for amalgamating a subsidiary into parent company and the power to replace the parent company's independent board.
Freeman went on to point out that the use of Section 396 and 397 would have "very serious implications" on the Prime Minister's "Make in India" strategy.
The investment experts hoped that Modi would be able to clear such "distractive" cases and issues and introduce more investor friendly regimes in the Indian market as he completes his first year in office, backed by successful talks with global investors and leaders of developed markets he has visited since taking office.
