OBG talks to Anand Sharma, Indian Minister of Commerce & Industry

Interview: Anand Sharma

Which of India’s economic sectors offer the most potential for Emirati investment?

ANAND SHARMA: The UAE is the 10th largest investor in India, with foreign direct investment (FDI) equity inflows from April 2000 to May 2012 standing at $2.23bn, or about 1.37% of total FDI equity inflows into the country during that period. The FDI into India is primarily focused on power, metallurgical industries, the services sector, construction activities, and housing and real estate.

If we include investments through other countries and portfolio investments, the total investments from the UAE into India will be over $6bn. There is great potential for investments from the UAE, particularly in sectors such as infrastructure, including special economic zone and National Investment and Manufacturing Zone (NIMZ) development, projects in the Delhi Mumbai Industrial Corridor (DMIC), petrochemicals and fertilisers, agro-based industries and food processing, civil aviation, and education and training to cater for the UAE’s labour requirements.

How are issues of clarity related to the investment climate in India being addressed in order to promote more efficient FDI from the UAE to India?

SHARMA: India’s rapid growth has steadily improved its attractiveness as an investment destination, and the government remains committed to improving the country’s ranking in the global “ease of doing business” indices. The initiatives taken by the government of India are geared towards the new economic drivers in the present context, i.e. globalisation and technology, which are operating simultaneously. They will also be instrumental in infusing transparency and sustainability. One step has been setting up Invest India, a joint venture between the Federation of Indian Chambers of Commerce and Industry and the Department of Industrial Policy and Promotion with a mandate to facilitate investment and assist those looking to do business in India.

Besides the liberalisation initiatives already mentioned, a very significant policy in this regard is the eBiz project, which aims to create an integrated single-window platform for web-enabled delivery of governmentto-business (G2B) services. eBiz is part of the Mission Mode Project, which is to establish an integrated single-window platform for delivering G2B services online, and falls under the National e-Governance Plan within the integrated services category. The project envisages setting up a G2B portal to serve as a one-stop shop for delivery of efficient services to investors, and addresses the needs of businesses and industries.

In order to meet the objective of developing the domestic manufacturing sector to its true potential, the government has put in place a national manufacturing policy to increase the sector’s share of GDP from 16% to 25% by 2022 and create 100m jobs by 2022.

One of the policy’s instruments is establishing NIMZs as standalone initiatives within towns and cities. The NIMZs would act as key enablers of the manufacturing sector. Good physical infrastructure, a progressive exit policy, structures to support clean and green technologies, appropriate investment incentives, and business-friendly single-window mechanisms are the cornerstones of this new initiative. The eight industrial cities under the DMIC project have already been declared NIMZs, and more NIMZs are expected to be set up.

What does the UAE Economic Vision 2021 plan offer for UAE-India trade relations?

SHARMA: The UAE Economic Vision 2021 has the aspiration of seeing the UAE ranked as one of the most developed countries by 2021, when it will be celebrating the golden jubilee of its formation. All around growth will naturally involve more exchanges of trade and services. In reaching this objective, India, which is one of the UAE’s main trading partners, can help by providing technological skills and services in developing agriculture, the food processing industry, small and mediumsized enterprises, and knowledge-based industries, which will go a long way in enabling the UAE to attain self-sustaining capacity as an industrialised nation.