France to invest $1 bn per year in India, signs 16 MoUs

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New Delhi | January 24, 2016 10:45 PM

Seeking to address concerns of investors, Prime Minister Narendra Modi today announced that the controversial Retrospective taxation is "a thing of the past" and this chapter...

French President Francois Hollande is greeted by Prime Minister Narendra Modi at the Rock Garden of Chandigarh on Sunday. (Reuters)French President Francois Hollande is greeted by Prime Minister Narendra Modi at the Rock Garden of Chandigarh on Sunday. (Reuters)

Seeking to address concerns of investors, Prime Minister Narendra Modi today announced that the controversial Retrospective taxation is “a thing of the past” and this chapter will never be opened again as his government was putting in place a predictable tax regime.

He also announced that France would immediately start investing USD 1 billion in India annually which will be scaled up later. The two sides also signed 16 MoUs, including one for manufacture of helicopters in India.

Addressing business leaders of the two countries here in presence of French President Francois Hollande, Modi said his government wants to ensure that foreign investors are clear about tax systems that will prevail in India over the next 15 years.

“I am for stable governance and predictable taxation system. The government is taking various steps to ensure this stability. This government is known for stable and predictable tax regime,” he said.

In this context he referred to the Retrospective tax imposed in 2012 through amendments in the Income Tax Act, a step which had led to an outcry and anxiety among the investors, particularly the foreign ones.

“Retrospective tax is a matter of past. That chapter will not be opened again. We are ensuring that neither this government nor the future governments can open this chapter,” Modi told the India-France Business Summit.

“Whosoever makes investment in the country should know about the taxation system in the country over the next five years, 10 years, 15 years,” he said.

The amendments in the I-T Act were brought to undo the Supreme Court judgement on British telecom major Vodafone’s tax liability case which was to the tune of Rs 11,000 crore.

Hollande, who began his three-day India visit from here today, is accompanied by a large delegation of CEOs.

Modi, who also attended the bilateral CEOs forum along with Hollande, said the French President informed him that his country will immediately invest over USD 1 billion annually in India and scale up the amount later.

Hollande said France has full trust on growth of Indian economy and the two countries can work in areas like solar energy, technology transfer, transport, roads, space industry, health, agro, and nuclear energy.

He said the agreements signed should be implemented and turned into reality.

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