NEW DELHI, 10 January 2004 — Prime Minister Atal Behari Vajpayee yesterday announced sops for Indians in the Gulf. These include a compulsory insurance scheme for Indian workers in the Gulf and South East Asia and reservation of seats for children of Gulf NRIs, or non-resident Indians.
Also, the children of Gulf NRIs will not be required to pay NRI fees and will be treated at par with resident citizens.
The compulsory insurance scheme was introduced Dec. 25.
The prime minister announced the measures while speaking at the second annual meeting of the Indian diaspora, part of a move by India to form closer ties with the estimated 22 million people of Indian origin living abroad who many see as a powerful potential source of investment and support.
A Pravasi Bharatiya (non-resident Indian) center would be set up in New Delhi to deal with the multifarious needs of the community, he said.
Vajpayee announced an end to a $100 million cap on Indian firms’ investment overseas, in a further push for the companies to go global.
“The year 2003 has seen many Indian corporates emerging as global players with impressive investment overseas,” Vajpayee said.
“To further reinforce this process, I am happy to announce that Indian corporates will hereafter be freely permitted to make overseas investments of up to 100 percent of their net worth, whether through an overseas joint venture or a wholly owned subsidiary.
“The current restrictions including a ceiling of 100 million US dollars are hereby being lifted,” he announced.
India has limited investments overseas in a bid to prevent a drain on foreign reserves but such curbs are no longer necessary, with the reserves last month topping $100 billion.
Vajpayee thanked the NRIs for their contribution.
Vajpayee said the government was also keen to encourage local agricultural firms to invest abroad. “We have decided to permit — indeed, encourage — Indian corporates to go global in the agriculture sector,” said Vajpayee.
“Accordingly, the existing restrictions on Indian corporates to undertake agricultural activities abroad, whether directly or through an overseas branch, will be removed,” he added.
At the same time, the prime minister urged overseas Indians to explore “exciting” opportunities thrown up by India’s booming economy. “Our achievements in the economic field have palpably elevated India’s standing in the world community,” he told the 1,500 delegates. “They have also opened up exciting new possibilities and opportunities — both for Bharatiyas (Indians) and Pravasi Bharatiyas (Overseas Indians). I invite all of you to avail yourself of the rapidly expanding opportunities.
“There never was a better time to be an Indian and never a better time to be in India,” he added.
India is forecast to achieve over 7.0 percent growth in the fiscal year ending in March 2004, putting the country in the global economic fast lane. Asia’s third largest economy is showing all the signs of a boom with the creation of 280,000 jobs in the hi-tech sector alone.
“India’s achievement in the IT sector have attracted the attention of the whole world and these include the achievements of both Indians in India and Indians abroad,” said Vajpayee. “What India’s trained manpower is offering through IT-enabled services is a win-win situation for India and the sourcing countries.”
He dismissed Western fears of job losses due to the increase in companies outsourcing services to India, where labor costs are lower. “These fears are misplaced.”
In highly competitive global markets, he said, it was natural for companies to use the latest information technology — and internationally available human resources — to enhance their efficiency.
Companies from the United States and other Western countries have been saving money by hiring about 170,000 workers in India over the past few years for payroll accounting, telemarketing and customer support services. The figure is expected to reach 1.1 million by 2008, industry groups say.
The United States has lost 250,000 call center jobs to India and the Philippines since 2001, according to Technology Marketing Corp., a company based in Norwalk, Connecticut. Several US workers’ groups have been pressing for new laws to prevent migration of jobs to lower cost countries such as India.
Vajpayee also said that all Indians could take pride in the achievements of Indians living outside the country. “For example, who would have thought that the average income of an Indian American would be 50 percent higher than the national average in the United State?”
