PM Modi hard-sells India to Germans, Merkel describes India as 'Asia's Silicon Valley'

It couldn’t have been bigger and better than this for Prime Minister Narendra Modi – getting a thumbs up from none other than visiting German Chancellor Angela Merkel who sweetened it further by describing India as “Asia’s Silicon Valley.” During her second leg of her India visit in Bengaluru on Tuesday, Merkel said “The reforms seen in last 15 months in India is promising… If liberalisation measures continue, we can give strong inputs.” [caption id=“attachment_2457758” align=“alignleft” width=“380”] Narendra Modi and Angela Merkel. Reuters[/caption] Such lavish praise by top leader of Europe’s number one economy on India as well as the Modi government couldn’t have come at a more opportune moment for Modi as the first phase of the five-phase polling in the crucial Bihar elections is scheduled to take place just six days later. But Merkel did not stop here. Sample a few more quotes from her: * India and Germany share similar demographic challenges. You have huge talent and we have shortages of skilled talent. We would like to partner with India in skill development. * India is competitive and its strength is IT. * We are looking at partnerships in railways, infrastructure, energy mobility and training. For his part, PM Modi tried his best to hard-sell India yet again to the Germans. Perhaps he didn’t need to do this. After all one doesn’t have to convince the convinced as Merkel’s perked up talk about India mentioned above indicates. Modi started his speech at the India -Germany summit in Bengaluru on Tuesday by underlining the tremendous potential in India-Germany economic collaboration as Germany ranks 7th among foreign investor countries in India and about 600 Indo-German Joint ventures are already operating in India. The PM’s narrative was telling Merkel, and through her to the West, how his government has been working with “a very open and global mindset” to make India an easy place to do business. He detailed how his government has fast tracked approvals and clearances for industry and infrastructure and conducted transparent auction and allocation of spectrum and of key natural resources like coal, iron ore and other minerals to create a level playing field for investors. Modi laid stress on his government’s commitment to build futuristic physical and social infrastructure and said an India Investment and Infrastructure Fund with an annual flow of Rs 20,000 crore (approximately 2.7 billion euros) into this fund from own resources was being set up. Besides, his government has also come up with the mechanism of Tax Free Infrastructure Bonds for projects in rail, road and irrigation sectors. PM Modi also highlighted the following key initiatives in ensuring ease of doing business: *Expedited regulatory clearances including security and environmental clearance. *Increased the validity period of Industrial Licences. *De-licenced a number of defence items and liberalised a number of restrictions like end-use certificate. * Increased the validity period of defence industrial licences up to eighteen years from three years. *A big ’no’ to retrospective taxation and reinforced this position by not going for imposition of Minimum Alternate Tax on FPIs. *Notified the regulations for the Alternative Investment Funds allowing foreign investments in such funds. *Rationalised the capital gains tax regime for Real Estate Investment Trusts and modified the Permanent Establishment norms. *Deferred the implementation of the General Anti-Avoidance Rules for two years and hopeful of rolling out the GST in 2016; *Working on a new bankruptcy code. Lastly, Modi mentioned mega investment opportunities for foreign investors, like building 50 million houses, setting up 100 smart cities,modernization of railway network and stations, setting up of new railway corridors, generation of 175 GW of renewable energy, and construction of transmission and distribution networks, National Highways, bridges, and Metro rails. In his characteristic manner PM Modi gave out his three one-line mantras for doing this: “It is the software of India that will move the hardware across the world; It is the talent of India that will master the technology; It is the market of India that will motivate manufacturing.”