Investors from Japan, US in forefront for PLI | Economic Times

India is open to reducing costs for investors as it seeks to boost manufacturing in the country and become the most investor-friendly nation, says Guruprasad Mohapatra, secretary at the Department for Promotion of Industry and Internal Trade (DPIIT). In an interview, he explains to Kirtika Suneja and Deepshikha Sikarwar how the government expects the recently-approved Production Linked Incentive (PLI) scheme for ten sectors to take off soon. Edited excerpts:Corporate tax cuts, Phased Manufacturing Programme and PLI — will these be able to rekindle India's manufacturing? Yes, these decisions will boost investor sentiment. India has undertaken structural reforms in the last 5-6 years to put the economy on a sound footing, besides reforms in agriculture, labour, insolvency resolutions and improving ease of doing business. These have been received favourably by both domestic and global investors. How will the new PLI play out? What kind of response have you seen?Before it went to the Cabinet, many inter-ministerial discussions were done based on which these products were selected. Now the ministries are working on details and getting internal approvals. They will then float the scheme and seek participation. We expect this whole process to be done in the next 4-5 months. Three months are required once you notify the scheme and ask for offers. Companies also have their own internal approval systems. So, around April, the schemes should be released. By June, the companies who have been selected for the PLI should have joined. We feel this will have a very good response based on the experience of (the scheme for) mobiles and electronics. Some more (sectors) can be added or adjusted. In government, there is nothing fixed. It is a dynamic call. But based on the experience of the mobile phones PLI (scheme), it is quite good.Are these enough to attract companies who want to relocate from China or is the government thinking of more?It is not the question of relocating from any particular country. That is not the target. To attract more investment in India, we have given the PLI and unlike other incentives in the past, it is production-linked based on a base year forecast and whatever is incremental. There are many incentives, but this is a specific one to boost manufacturing.Investors from which geographies have shown the highest interest in India? Which sectors are they particularly keen on?While investors from across the globe are interested in India, we find more interest from the US, Japan, South Korea, France and some North European countries. Investors are interested in many sectors, but we see more interest in chemicals, metals and mining, energy, telecom, retail and ecommerce, and electronic system design and manufacturing.How many companies have expressed interest to invest in India? What kind of response do you see?There are many companies. Announcements are happening and people are setting up India-specific offices, recruiting people and taking land. Investment decisions do not happen overnight. They study India and a lot of handholding happens. We see a lot of investment coming.What feedback have you got from various project development cells? How does the investment pipeline look?PDCs have been created in 29 departments. Those in the ministries of electronics & IT, food processing, petroleum & natural gas, pharmaceuticals, heavy industry, renewable energy and DPIIT are showing very high investor engagement. They are actively promoting and expediting projects in railways, smart cities and other infrastructure projects. Quality remains a key issue in local manufacturing as also for some imports. For which sectors is the government planning to issue quality control orders?The DPIIT has issued QCOs for 100 products covering more than 110 HSN codes. Of the 71 HSN codes identified based on import surge, QCOs have been notified for 22 while 13 are under consideration. QCOs are not feasible on the rest. Various ministries are working in a defined timeline. We are trying to complete that work by December.The government is looking at easing FDI caps and rules to attract more investment. What is the roadmap to do so?Review of FDI policy is an ongoing process and changes are made from time to time. The intent is to make India’s FDI policy the most investor friendly. In the last few years, FDI has been liberalised across many sectors including defence production, civil aviation, coal mining and retail trading. Similarly, local sourcing norms were eased in FDI in single brand retail. The recent liberalisation in defence manufacturing has a great potential to promote Aatmanirbhar Bharat in defence. How many investment proposals have been cleared and how many are stuck from India’s neighbouring countries since the FDI policy was changed?In the post-Covid period, one change approved by the government in FDI was to prevent opportunistic takeover of Indian companies distressed by the pandemic. Similar provisions have been made to safeguard local companies in the post-Covid era in other countries. These proposals from countries land bordering India are under examination by various ministries and appropriate decisions will be taken by them. From the land locked countries, 100-odd proposals have come. They are now on the approval route. The ministries concerned will work on that. Other than that, above 95% of the proposals are automatic.By when is the ecommerce policy likely to be announced?There are issues in ecommerce, like data privacy and protection, consumer rights, export promotion and other regulatory and promotion issues which require consultation with the industry and regulatory authority. Consultations are on and we are working towards bringing out an ecommerce framework which is suitable for a country as complex and large as India.Are any changes needed in India’s patent laws to ensure easy and affordable access to a vaccine or any other medicine in the fight against Covid-19 and any future pandemic?We have a robust IPR regime in our country. Indian patent laws have been drafted in a way to benefit from the flexibilities given by the TRIPS (Trade-Related Aspects of Intellectual Property Rights). This law has adequate provisions for allowing permission to use patents to facilitate easy and affordable access to vaccines, medicines and medical devices.