Fumihiko Ike, Honda Motor’s global chairman, said that the new government in India should take steps to improve investment climate in the country as doing business in India remained difficult and processes in the country was complicated and burdensome. Ike, who also heads the crucial Japanese Automobile Manufacturers Association (JAMA), said the new government should improve the poor infrastructure and end the uncertain tax regime.
Ike's statement came after British telecom giant Vodafone echoed similar sentiments and European oil major BP also expressed "frustration" over the delay in gas price hike, which was delaying the proposed investment by the company. Vodafone, which battles a Rs 200 billion claim by India over a capital gains tax issue, said foreign companies find it "difficult" to do business in India because of slower government clearances.
Speaking at the 54th annual convention of Society of Indian Automobile Manufacturers (Siam) in Delhi, Ike said the Indian government needs to take steps to make the country an attractive destination for foreign investors and "improve the business environment for investments".
Ike said component suppliers to automakers "encounter problems" in getting business permits and having their paperwork done and many of the processes related to the setting up of factories are "complicated" and thus require simplification. Ike made a special mention of the tax regime in India which he said was "burdensome" when compared to other countries. This, he said, was "impeding investments" in India.
The Honda chief sought an early rollout of a single goods and services tax. "India has a complex domestic tax system. We want a single tax system."
However, while highlighting the problems being faced by foreign investors, Ike had a special mention for Prime Minister Narendra Modi who promised to ease investments in India during his recent trip to Japan.
Ike said the Japanese investors were enthused by Modi's call to increase investments in India. "He has promised that red tape will be replaced by red carpet. This makes us optimistic on making investments."
BP Plc, whose $7.2 billion investment in 2011 was the largest foreign investment in the energy sector in India, said that the delay in implementation of a natural gas price hike was frustrating.
