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Lee for better investment climate in India

P.S. Suryanarayana

"In China, a communist country, the labour commissioner is not a problem in regard to the flow of FDI""In India, which is not a communist country, when will we be able to hire and fire workers?"

SINGAPORE: Singapore Prime Minister Lee Hsien Loong on Thursday said the two-month-old Comprehensive Economic Cooperation Agreement (CECA) with India had created "a lot more favourable" conditions for bilateral engagement than before.

But as some issues remained to be resolved, Mr. Lee hoped that India would "continue to improve the investment environment." He was addressing the Foreign Correspondents Association in Singapore.

Asked whether India was still an optional destination for Singapore investments, instead of becoming a preferred choice after the signing of the CECA, Mr. Lee said: "India is not an optional destination. ... It is two months since we signed it. I think, it is early days yet ... The interest is there. Certainly, the conditions have become a lot more favourable because we have the CECA, ... It will take time for ... the reality to grow. But, compared to the potential of the market, there is much more which can be done."

"I would not be candid if I did not acknowledge that there are some issues which have not been ... resolved." Noting that the regional newspapers and the Indian media had eloquently described these issues, he said "we hope that the Indian Government will be able to act on them and to continue to improve the investment environment."

An Indian group of younger parliamentarians, who called on him here on Wednesday, "understand the problem". Narrating their conversation, Mr. Lee said that "in China, a communist country, the labour commissioner is not a problem" in regard to the flow of foreign direct investment into that coun

try. "In India, which is not a communist country, when will we be able to hire and fire" workers, he wanted to know.

The parliamentarians, led by Milind Deora, pointed out that the labour commissioner was being made the development commissioner in regard to the special economic zones in India now. Sharing the "hope" of the parliamentarians that the labour commissioner would look at the FDI-related matters from "a development perspective," Mr. Lee sounded a note of optimism that some Singapore companies would be among those to benefit as the investment "environment" in India "improves."

Mr. Lee's updated comments on the CECA, which came into effect on August 1, acquire importance in the new context of apparent moves by some Singapore companies to reassess the investment opportunities in India, including its infrastructure sector.

East Asia summit

Mr. Lee said, in response to a question, that the anti-terror issue would be an item on the agenda of the first-ever East Asia summit in Kuala Lumpur later this year. India will be a participant, the others being the Association of South East Asian Nations (ASEAN) as the core group, China, Japan, South Korea, Australia and New Zealand.

For India and the ASEAN as also Australia and New Zealand, the anti-terror issue was on top of their agenda, but not so in the case of China, Japan and South Korea. At the same time, "India's concern is not terrorism in southeast Asia" as such but "terrorism in South Asia, and to [its] north and northwest," he noted.

It would, therefore, be "very difficult" for the East Asia summit to get involved in such "very complicated" subjects very early in the "process" of developing "this new grouping," Mr. Lee said.

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Lee for better investment climate in India

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