The country needs to react quickly to geo-political developments to grab the opportunities emerging from shifts in the global supply chain, Prime Minister Narendra Modi said on Saturday as he highlighted the changed perception of India among global investors.

“When we are moving in mission mode to make the local global, we have to quickly react to all geo-political developments. A robust mechanism is needed to fulfil any sudden spurt in demand for global supply chains,” Modi said at an event organised by industry association Assocham.

“The need of the hour is better coordination among the external affairs ministry, the commerce and industry ministry and industry organisations. I appeal to you to suggest measures on how we can build a mechanism to quickly respond to global transformations,” he said without naming China.

Modi said the Centre has changed the world perception about the country from “why India” to “why not India”.

Highlighting the reforms spanning from the manufacturing sector to labour during the last six years, he said the country has emerged as the world’s preferred destination for investment. Record foreign direct investment (FDI) and foreign portfolio investment (FPI) during the pandemic is a testimony to the faith that the world now has in India, he said.

Pat for Tatas

The Prime Minister also praised the Tata group for its role in India’s development.

“Tata Group has played an important role in India’s development,” Modi said after presenting the “Assocham Enterprise of the Century Award” to Ratan Tata, marking the contribution of the business group in the nation’s progress.

Tata Group Chairman Emeritus Ratan Tata thanked Modi for leading the country from front during the difficult time of pandemic and hoped that the industry will now take forward the benefits of his strong leadership.

Modi cited scrapping of 1,500 old and obsolete laws and farming new ones that in tune with the changing investment order as an example of his government’s outlook. “Earlier investors cited high tax rates to say Why India but today (corporate) tax rates are so competitive that they say ‘why not India’,” he said.

Previously, a web of regulations and rules were cited by investors to ask why to invest in India but easing compliance burden in the new labour laws have made them say ‘why not India’, he said.

Red tape previously made investors say Why India but a red carpet is now making them say ‘why not India’, he said. From a non-existent culture for innovation to a new ecosystem promoting and nurturing startups has given the world confidence to say ‘why not India’

“Earlier there was so much government interference that investors said ‘why India’ Today the faith reposed by the government in the private sector and encouragement of foreign investors have made the same people say ‘why not India’,” he said. He stated that new India is pushing towards AatmaNirbhar Bharat (self-reliant India).

During the April-September period, FDI inflows were at $40 billion, which has been higher than last year by about 13 per cent. In just eight months of the current financial year, net foreign portfolio investment (FPI) into equities jumped by Rs 1,40,295 crore, the highest-ever in any financial year.

The Government’s main focus is on manufacturing and production linked incentives have been given to boost domestic capabilities and capacity, he said. The Prime Minister called on the industry to make all efforts to make India self-reliant.

Modi asked the industry to adopt the best corporate governance and profit-sharing practices. He also said investment in research and development (R&D) must be increased and the private sector must scale up investments.

“There is a great need to increase investment in R&D. In the US, 70 per cent of investments in R&D is done by the private sector, in India the same is done by the public sector. A big chunk of this is in the IT, pharma and transport sectors. Today the need is of increasing the private sector share of investment in R&D,” he said.

More R&D funds should be set aside across sectors such as agriculture, defence, space, energy, and construction.

He said Indian companies need to adopt the best practices of the world from corporate governance to profit sharing. “If we make our approach purpose-oriented along with the profit-centric approach, then more integration with the society will be possible," he added.