Addressing the media on his maiden visit to the country, Mr Zeman said: "Construction work at the project site in Aurangabad has been stopped due to the perceived obstacles from the new auto policy. The project will probably be taken up after the new policy is announced."

Mr Zeman also said that he had discussions with Mahindra & Mahindra (M&M) chairman Anand Mahindra regarding the proposed divestment in the state-run tractor company Zetor. The tenders will close in April for the divestment programme. M&M is reportedly one of the four bidders for Zetor.

Elaborating on the proposed divestment, Mr Zeman said that M&M could gain by leveraging Zetor's markets in Europe and Latin America. He also added that though Zetor had a committed workforce and modern plant, it lacked a modernised sales management team. Mr Zeman added that facilitating co-operation on the Skoda project and the tractor industry figured on the list of priorities on his visit. The Prime Minister is accompanied on his visit by a high level cabinet and business delegation of about 20 companies.Outlining the possible areas of co-operation between the two nations, Mr Zeman said that the pharmaceutical sector, energy, tractor, aircraft and defence were the core areas where the two countries could co-operate.

Earlier, he addressed a seminar on "Indo-Czech Business Potential" organised by MVIDRC World Trade Centre and All India Association of Industries(AIAI) in the city.

Outlining the measures that his government had taken to rejuvenate the economy, Mr Zeman said that the rate of inflation had come down substantially and foreign investments to the country had increased. He also met representatives of various organisations in Mumbai.

A memorandum of understanding was signed between the Confederation of Czech Republic Association and AIAI to promote trade delegations and joint ventures between the two countries.