The Hindu : International / India & World : We welcome foreign investment: Kamal Nath

Online edition of India's National Newspaper
Thursday, Jun 10, 2004

International

International - India & World

We welcome foreign investment: Kamal Nath

By Sridhar Krishnaswami

WASHINGTON, JUNE 9. The Minister for Commerce and Industry, Kamal Nath, has said that the Congress-led United Progressive Alliance Government will carry forward the reform process and will welcome foreign direct investment. He also sought to debunk the notion that the government was against privatisation.

"We have not abandoned privatisation ...You can be rest assured that there will be a host of privatisation opportunities," he told delegates to the 29th annual meeting of the United States-India Business Council here via video-conference.

He pointed out what the Prime Minister, Manmohan Singh, had said on the subject — that reforms would have a "human face" and that the gains would be linked to designated social development sectors.

"Our government welcomes foreign direct investment. You can be sure that investors will find a very conducive atmosphere," Mr. Kamal Nath said.

While "all kinds of FDI" were always welcome, "investments just for acquisitions do not excite us," he said.

"What we really want is foreign direct investment that generates maximum economic activity and thereby generates employment that creates wealth for our people."

Mr. Kamal Nath also touched on the issue of outsourcing — a subject that has attracted considerable attention in the U.S.

"It is ironic that countries which used to be in the forefront of free, open and liberal trade are even now passing legislation that hinder business processes like outsourcing and I think this is unfortunate.

Several authoritative studies have shown that outsourcing is a win-win situation. While India gains in terms of employment, developed countries benefit in terms of profit. If something is mutually beneficial, it would be irrational to block it off," he said.

One of the Speakers was the U.S. Ambassador to India, David Mulford, who said that the government was keen on maintaining the "very strong" relationship with the United States which today was "running at an all time high."

"We are getting strong signals that in matters of both foreign policy and economic policy, India wishes to continue this strong relationship ... which is comprehensive, going far beyond the narrow bilateral government-to-government relationship that have characterised things of the past," Mr. Mulford said. "We look forward to working with the new government. We look forward to excellent relations with the Congress party and its allies in government," he said.

In stressing the theme of continuity amidst political change in India, Mr. Mulford said that things were still at the formative stage in New Delhi and that while there was every reason to be positive, it was not possible to get into any detailed explanations of what to expect down the road.

"These are early days in this government which is still in the process of forming itself, feeling its way along, finding its policies," Mr. Mulford said.

"We feel positive with what has been indicated to us so far. But at this time I think it is not possible to be detailed as to what we could expect," he said adding that the major effort of the new government in India would be to recast policy without losing growth momentum.

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