Prime Minister Narendra Modi on Friday said the government's decision to get rid of retrospective taxation reflects India's commitment to deliver on promises and sends a clear message to all investors about the opening up of new possibilities.
Addressing a virtual meeting with heads of Indian missions and other stakeholders from the trade and commerce sector, Modi urged officials to take advantage of new opportunities created by changes in global supply chains in the post-Covid-19 era.
The meeting, the first of its kind, was joined by commerce minister Piyush Goyal and external affairs minister S Jaishankar. The theme for the meeting, as outlined by Modi, was "Local goes global – Make in India for the world".
Referring to the importance of stability in doing business, he said the decision by India to get rid of retrospective taxation shows the government's commitment and consistency in policies. "It sends a clear message to all investors that, moving forward, India is not only opening doors to new possibilities but the decisive government of India has the will to fulfil its promises," he said.
The government on Thursday introduced a Bill in Lok Sabha to prevent the income tax department from raising tax demands retrospectively, a move that attempts to end long-pending disputes with foreign firms such as Vodafone Plc and Cairn Energy Plc that together involve a sum of more than ₹20,000 crore.
The move was seen as investor-friendly, and seeks to bring to an end messy litigation and arbitration, especially with Cairn, which has resulted in the company staking claim to India's overseas assets.
Modi said that the celebration of the 75th Independence Day is an opportunity to build a clear vision and roadmap for India that includes the country's export ambitions. As the world shrinks due to physical, technological and financial connectivity, new possibilities are being created for the expansion of India's exports. Modi stressed the importance of strengthening exports to regain India's old share of the global economy.
He urged stakeholders to focus on taking advantage of new opportunities created by changes in the global supply chain following the pandemic. As the country moves towards "Atmanirbhar Bharat", one of its goals is to increase exports manifold by accessing the global supply chain. "While encouraging competition and excellence, we have to prepare global champions in every sector," he added.
Modi listed four factors that are crucial for increasing exports. Manufacturing has increased and has to be qualitatively competitive, while the problems of transport and logistics should be removed jointly by the Centre, states and private stakeholders. The government should work with exporters, and the international market for Indian products has to be expanded.
He stressed the role of states in achieving export targets, implementing reforms, attracting investments, ensuring ease of doing business and creating last mile infrastructure. The central government is working closely with states to minimise the regulatory burden to increase export and investment, he added.
Export targets can be achieved only through a holistic action plan. With almost half of India's exports going to only four major destinations and engineering goods, gems and jewellery, petroleum and chemical products and pharmaceuticals accounting for 60% of exports, there is a need to find new destinations and new export products, he said.
The event was also joined by secretaries of more than 20 departments, state government officials, and members of export promotion councils and chambers of commerce.