NEW DELHI - Prime Minister Narendra Modi pledged Thursday to slash red tape and harness the benefits of a huge young population as he launched a campaign to attract global business to manufacture in India.
India's business-friendly new leader wants to revive his country's flagging economic fortunes by kickstarting a manufacturing sector long eclipsed by that of neighbouring China.
"We don't need to invite the world to India, they are ready to come. We just need to give them our address," Modi said at the launch of his 'Make in India' campaign.
"India is the only country in the world that has the power of democracy, demographic dividend and demand," he added, saying India's young people stood to benefit from manufacturing growth.
Modi's right-wing Bharatiya Janata Party swept to power in May on a mandate to revive the economy which is going through its worst slowdown in two decades.
The government has already relaxed rules for foreign investors, eager to create jobs for the millions of Indians who enter the employment market each year.
But any company seeking to do business still has to go through byzantine rules and regulations as well as from having to deal with a stringent tax regime.
Modi said he had been "pained" to hear stories of companies abandoning India because they had lost confidence in a country notorious for cumbersome bureaucracy and high taxation.
"I asked my staff, 'why are government forms so lengthy?' And there was no reason," he told an audience of business leaders including Reliance Industries head Mukesh Ambani, India's richest man, saying the government should facilitate business, not make it more complicated.
Commerce Minister Nirmala Sitharaman said there was "huge untapped potential" for manufacturing in India, which accounts for just 15 per cent of gross domestic product (GDP), far less than many other Asian nations.
"We want to make India a global manufacturing destination," she said, adding India would aim to have a manufacturing sector that accounted for 25 per cent of its GDP.
The World Bank recently placed India a poor 134th among 189 economies in its ease of doing business report while regional rival China ranked 96th.
British mobile giant Vodafone is locked in a US$2.4 billion (S$3.04 billion) tax row with the Indian government while Finnish company Nokia also saw its plant in India being seized over a tax dispute.
Kenichi Ayukawa, head of Indian car manufacturer Maruti Suzuki, said India had the potential to be a world leader in the sector, but was being held back by red tape and other issues.
"Costs of production in India increase because of various government policies, procedures, regulations and the way some of the laws are implemented," he said at the launch, adding he was confident such barriers to growth could now be removed.
Red carpet for investors
In the lead-up to the launch, the government revamped an Invest India unit which will now act as the "first reference point" for guiding foreign investors on all aspects of regulatory issues.
In addition, a newly created web portal www.makeinindia.com will answer all investment-related queries from business entities.
The government has identified 25 sectors including automobile, aviation and construction that have potential to attract investment.
Although it has moved to open the insurance, defence and transport sectors to foreign investors, the government has also closed the door on foreign supermarket chains such as WalMart who had been hoping to enter the Indian market.
The campaign comes just hours before Modi is set to travel to the United States where he will have breakfast with heads of Google and PepsiCo, seeking to attract investment.
The government's manufacturing push comes at a time when many global companies are seeking an alternative to China as costs and risks there rise.
"India can become an alternative to China for global manufacturers," Anjan Roy, an independent economist based in Delhi told AFP.
"We have a large domestic market that is being largely serviced from imports.
"Manufacturing has been lagging for a long time, growth in this sector has been marginal and sometimes it has even slipped into the negative zone. So this push by Mr Modi is very timely." The Asian Development Bank said Thursday that India's economy showed promise of a "turnaround" following Modi's election, forecasting GDP would grow by 6.3 per cent next year, compared to an earlier projection of six per cent.