‘India still attractive for investments’

WASHINGTON- Agence France-Presse

India appears to be a good investment destination,’ says Minister Mukherjee. REUTERS Photo

India’s Finance Minister Pranab Mukherjee has defended the South Asian country as an attractive place to invest, despite controversial plans to make foreign companies retroactively liable for taxes.

Mukherjee sought to calm the row over proposed legislation to chase overseas firms for taxes on mergers involving Indian assets, saying investment decisions are not made solely on the basis of “tax conwcessions”.

Deciding whether to put money into an economy is “based on what’s the size of the market, whether the systems are transparent and what’s the purchasing power of people”, Mukherjee was quoted on Saturday by the Indian media as saying.

India, with its increasingly affluent population of 1.2 billion people, remains an attractive country in which to invest, he told an audience on the sidelines of meetings of the World Bank and the International Monetary Fund in Washington on April 21.

“From all these standpoints, India appears to be a good investment destination,” he said.
 India’s cash-strapped government had been widely expected to plug merger tax loopholes in its budget last month.

 But the retrospective nature of the legislation has stirred an international outcry at a time when India urgently needs big-ticket foreign investments to upgrade its dilapidated infrastructure and spur slowing economic growth.

Vodafone -- India’s biggest foreign investor -- faces a $2.2 billion tax bill over its 2007 purchase of the Indian unit of Hong Kong-based Hutchison Whampoa. It has threatened to take India to international arbitration.