The finance ministry held a meeting on Tuesday with foreign portfolio investors (FPIs) to address their concerns on taxation and in order to attract more investments in India. Around 35 FPIs including Citi, JP Morgan, Goldman Sachs participated in the interaction and gave their suggestions to ministry officials on various issues, some of which may be even considered in the Budget for next financial year.
“Suggestions both in terms of process simplification as well as some new suggestions have come … some taxation issues were raised. Department of Revenue also participated in the meeting so we will examine and look at the suggestions they have made,” Economic Affairs Secretary Shaktikanta Das said after the meeting.
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He further said that foreign investors are looking at bigger opportunities to invest in India and that the government will like to consolidate inflows into Indian markets. “Nobody had reservations about fundamentals and the robustness of where Indian economy is today positioned. They are looking at bigger opportunities for investing in Indian market. So overall outlook, I would say, is very very positive,” he said.
The ministry will take decisions based on the suggestions after taking inputs from various agencies, he said adding that the meeting was focused on improving ease of doing business in India. “The government would like to consolidate current position of India and attract more of investment into our market … we will interact among ourselves with the concerned agencies like the Reserve Bank of India, Securities and Exchange Board of India who were present at the meeting. And whatever decisions are required, we will take that,” Das said. Asked if their suggestions would be part of the government’s Budget, he said, “We are now coming closer to the Budget, some of these suggestions may merit a look in the context of Budget.”
The meeting with foreign portfolio investors will be followed by an interaction with domestic investors as well, Das said.
FPIs have been meeting finance ministry officials regularly this year in view of the changes in tax treaty with Mauritius and the ongoing reworking of tax treaty with Singapore. Foreign investors have also expressed concerns regarding proposed implementation of General Anti-Avoidance Rules (GAAR) from April 2017. Last year, a selloff by foreign investors had hit the Indian markets amid confusion regarding levy of minimum alternate tax (MAT). The Centre had later clarified, exempting investors from paying MAT retrospectively from April 2001 if they don’t have a permanent establishment in India.