PM Modi woos German investors at Hannover, promises stable environment for business

Hannover: Saying that the Make in India lion was a "symbol of new India" and a "national movement", Prime Minister Narendra Modi on Sunday told the Hannover Messe audience that his government has moved "with speed, resolve and boldness" to create a stable economic environment, including by opening up FDI in insurance, defence and railways, building a stable tax regime and assured protection of Intellectual Property.

In his inaugural address at the Hannover Messe, the world's largest trade fair in which India is the partner country, Modi said, with German Chancellor Angela Merkel listening keenly that all the credit rating agencies have spoken "in one voice of optimism about India. We know that the wind is blowing in the right direction, and it has made us the fastest growing economy in the world."

He said that in this time of political instability and economic challenges and with threats of violence, "India will do its part as an anchor of economic stability, an engine for growth, and, as a force of peace and stability in the world."

Touching on key elements, Modi said that investors seek not just an attractive destination but also an environment that is stable where rules won't change frequently, and "there would be no surprises".

"So, we have moved with speed, resolve and boldness to fulfill our pledge".

He said his government is creating a "stable economic environment that inspires confidence at home and abroad", for which it is pursuing strong fiscal discipline. "I know how much Chancellor Merkel will appreciate that point!", in reference to Merkel's insistence that the Eurozone countries abide by fiscal discipline.

Enumerating the "sweeping steps" taken by his government, including opening up more FDI in insurance, construction, defence and railways, Modi said: "We are removing unnecessary regulations and simplifying our procedures" and using digital technology to eliminate multiple approvals and endless wait.

Modi said the government has set up Invest India and country desks that will be networked to the states. "We will nurture innovation and protect your intellectual property...We are reforming institutions in ways that has not happened in decades.

We are building a tax regime that is predictable, stable and competitive. We will now address the remaining uncertainties. The Goods and Services Tax is a long needed revolution that is becoming a reality."

He said the Railways will now be a fast track to India's transformation and open to 100 percent Foreign Direct Investments.

He said the government has set up a National Infrastructure and Investment Fund and a new institution for integrated development of the infrastructure sector. He said the government has set a target of 175 Giga Watts of new capacity for renewable and clean energy in the next seven years.

Modi said his government has moved with transparency and speed and resumed long stalled projects and allocation of resources. The government is "instituting a rational framework for acquisition of land without causing distress to farmers and other landowners", he said referring to the land acquisition bill.

"We are creating a predictable and transparent environment approval process that will protect our natural heritage", he said and added that his government is moving in tandem with the states.

"But, I am also aware that it is easier to change policies and write new laws than it is to change attitudes, culture and systems. Every CEO who has tried a turnaround knows that. Our task is huge, it won't be completed overnight. But, I am confident that it will. And, we are moving firmly and clearly in that direction. The wind of change is there. and, it is gathering speed," Modi said in a speech that was loudly applauded.

Earlier, in his speech, Modi thanked the Hannover Messe authorities for their generosity in "allowing us to unleash our lions in this city". He said the lions "are a symbol of a new India. They roar, but with a message of friendship and promise of partnership, from 25 billion people of India.

This is also the message of 15 states, 20 CEOs and 350 companies from India participating in this Fair."

Merkel, speaking in German, said that a forum would help both countries chart a new course in the future.

She said Germans have "shown they are flexible to accept a lion's presence in our midst and allowing it to move". She said Germany "very warmly welcomes" the Indian delegation, "including a lion", evoking smiles.

Merkel said India and Germany would hold inter governmental consultations later in the year when they can go over their problems.

"India and Germany should also change the way we do business," she said.

She said Germany has cooperative federalism and can learn from India's example.

Referring to the trade volume, she said it stands at $16 billion and Germany is the most important trading partner in the EU "and we wish to remain that way".

Referring to Modi's France visit, she said that she was aware that he is coming from the neighbouring country "and we know we have huge competition" and the more the competition the better it will get.

She said Germany will also have a Make in Germany and also a platform for the SMEs in the fair.