India’s business environment is very tough, says Japanese lobby

February 12th, 2009 - 11:02 pm ICT by IANS  

New Delhi, Feb 12 (IANS) Describing the tax system in India as “too complicated and difficult to understand”, a Japanese industry lobby Thursday asked the commerce ministry to look into a number of “serious” problems that impede Japanese investment here.
The Japan Chamber of Commerce and Industry in India (JCCII) Thursday submitted a report to the department of industrial policy and promotion, listing 61 issues related to infrastructure, taxation system and customs clearance that need to be settled.

With more Japanese companies entering India, “the problems that they are facing have become more serious”, the report said.

It appreciated that some issues have been redressed, but pointed out that the larger business environment here is still “very tough”.

“However, the reality is that many problems of land acquisition and utilisation, taxation, infrastructure, labour, logistics, intellectual property rights, regulations of foreign capitals, visa, and administration’s inefficiency and non-transparency have not been resolved, although they are not new issues,” it added.

According to the report, India’s land acquisition and utilisation procedures were “so complicated and non-transparent that they become major obstacles to the facilitation of Japan’s investment in India”.

“Although there are clauses in a contract with the industrial parks that the latter should develop power, water supply, drainage, and so on, such clauses are not honoured. This situation greatly discourages Japanese companies from expanding their business hereafter,” the report said.

It called for simplification and speeding up of procedure for applying for various permissions related to construction.

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