Tata raps India for driving off investment

Updated 07 December 2012
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Tata raps India for driving off investment

NEW DELHI: Indian tycoon Ratan Tata lashed out at a “venal” business climate and a top foreign investor condemned “nightmare” red tape as the government won a vote on allowing in more foreign investment.
The problems of operating in famously corrupt and bureaucratic India were raised as the minority government survived a final parliamentary vote to let in foreign supermarkets — a key plank of its renewed economic reform agenda.
Tata, outgoing head of the Tata $ 100-billion tea-to-steel empire and known as patriarch of India’s business community, said his successor, Cyrus Mistry, would face a major struggle not to compromise the group’s well-known ethical standards and surrender to a “venal system.”
Separately, the head of British shoemaker Pavers, one of the first retailers to be allowed to operate in India under new 100-percent foreign ownership rules, said navigating the nation’s overwhelming red tape was a “nightmare.”
“Regulations are a nightmare for every retailer whether from outside India or the domestic retailer,” Stuart Pavers, president of the family-owned firm, told India’s Mint newspaper in an interview.
Congress Premier Manmohan Singh’s government is seeking to steer a string of reforms through parliament that aim to open up sectors such as retail, insurance and aviation to foreign investors and make it easier to do business.
But the business chiefs said the government will have to work hard to improve the corporate environment for investors — even with the lure of a growing middle class increasingly adopting Western trends and tastes.
India has long been criticized as one Asia’s most inefficient bureaucracies, with its byzantine regulations, widespread corruption and political dysfunction seen as major deterrents to foreign investment.
Several months ago, one of India’s top businessmen, N. R. Narayana Murthy, chairman emeritus of software giant Infosys, voiced similar strong complaints, saying India had “cut (its) own legs off” with suffocating regulation.
Tata, who retires December 28 when he turns 75, noted it still took the best part of a decade to gain clearance for major projects and this was deterring foreign investors.
“Different agencies in the government have almost contradictory interpretations of the law, or interpretations of what should be done,” Tata told the London-based Financial Times.
Tata accused Singh of forcing the group to look abroad by failing to address complaints about bureaucracy and told the Financial Times the conglomerate planned to turn to other emerging markets for expansion.
“These are things which by and large would drive investors away in most other countries,” he added.
Tata contrasted the government’s attitude toward its industrial sector with that of neighboring emerging market giant China where the group recently opened a Jaguar Land Rover factory.
“There’s a great, marked difference (in) government support,” he said.
“If we had the same kind of encouragement to industry... I think India could compete definitely with China.”
Sweden’s IKEA group is still struggling to jump through bureaucratic hoops to set up shop in the world’s second-most populous nation and one of the furniture retailer’s last untapped large markets.
Indian media recently reported that the government had imposed sweeping curbs on what IKEA can sell at its planned new stores, including a ban on its famed meatballs.


EU could compensate firms hit by US sanctions over Iran — French minister

Updated 20 May 2018
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EU could compensate firms hit by US sanctions over Iran — French minister

  • In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions

PARIS: France is looking to see if the European Union could compensate European companies that might be facing sanctions by the United States for doing business with Iran, said French finance minister Bruno Le Maire on Sunday.
Le Maire referred to EU rules going back to 1996 which he said could allow the EU to intervene in this manner to protect European companies against any US sanctions, adding that France wanted the EU to toughen its stance in this area.
In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions.
European firms doing business in Iran face sanctions from the United States after President Donald Trump withdrew from a 2015 nuclear deal with Iran.
“Are we going to allow the United States to be the economic policeman of the world? The answer is no,” Le Maire told C News TV and Europe 1 radio on Sunday.
Le Maire added it was important Italy kept its EU budget commitments, in light of plans by Italy’s new coalition government to ramp up spending — which could put Rome at odds with the EU.