'India can attract significant FDI if it sorts out tax issues'

 Japanese investors remain “very positive” on India, saying there is a big opportunity for placing “significant” FDI if the country can sort out some of its tax issues, a top official of Japan’s financial services major Nomura has said.

Alastair Newton, Managing Director for global market research and senior political analyst at Nomura International, also highlighted investors’ concerns about retrospective taxes such as the Vodafone case, and among other, the General Anti Avoidance Rule (GAAR), which has been postponed for now.

“I do think there is a big opportunity in India (but) if it can get some of the tax issues sorted out to attract significant Foreign Direct Investment (FDI) investment from Japan,” he said at a media briefing here on Friday.

The Japanese also view India more positively as compared with other investment-seeking Asian markets, Newton said, citing the political instability in Thailand, economic growth slowing down in China and people’s reaction to some of the foreign- invested plant and factories in Vietnam as the reason for it.

“If you look at the offering of other nations in Asia, it is not any more attractive as it used to be. I think India has great opportunities to take on some of that investment if you can get it right,” he said.

Newton said the Japanese investors have confidence in the current dispensation.“Senior management in major Japanese corporations, who already know Prime Minister Narendra Modi well and have invested in Gujarat, remain very positive over prospects in India over time,” he said.

“Headline grabbing retrospective tax bills slammed on big companies is a big disincentive to investment in India,” Newton said.

He also shared his observation and comments from other investors, including fund managers who said they would like to do more business in India but the bureaucracy is making it tough.

He, however, said he was hopeful that there would be legislations passed to settle these issues.