Hailing India's efforts since economic liberalisation in 1991, he said the country needed to capitalise on its large human capital and build on the success in the information technology sector. India would have to improve investment climate to attract foreign investments, Lee said, indirectly referring to the implementation the General Anti-Avoidance Tax Rules (GAAR), which was in the midst of controversy recently. Global industry associations and investors expressed apprehensions over India's business environment following the announcement of GAAR.
The introduction of retrospective tax as in the case of Vodafone also added to the uncertainty among overseas investors. "Companies will look at the consequences of the changing rules. If a company has already invested in India, it abides by rule. The companies which have not yet invested in India, they will have to make their assessments. They will look, assess and make calculation that these are the new rules, what does it mean for me after I invest," Lee said. Every Finance Minister, he added, should look at the implications of changing rules. Referring to the challenges before India, he said, "it's a very diverse country and you need to find some way to make everybody feel that."
Loong wants India's active engagement with Asean
Loong also pitched for India's active participation in the Association of Southeast Asian Nation's (Asean) new Regional Comprehensive Economic Partnership (RCEP) to lend stability in the region. Effusive about India's rise in the past 20 years as an emerging economy, Lee said he discussed the issue of RCEP during his meetings with his Indian counterpart Manmohan Singh and other ministers and urged them to take a positive decision with regard to this.
"We want India to be partners in RCEP. I have been discussing this in my meetings so that India can be actively engaged in the region. India's participation will enhance stability and add influence," he said. "We welcome you to participate in the Asean forum so that it will help keep ASEAN relevant," he added. Asean's new RCEP will enhance India's access to its market of 600 million. He said Asean needs to be strengthened and all member countries and Asian nations like India, China and Japan should help in this process.
To a question how the world will be in 2032, the Singapore Prime Minister said it would be "radically different" if India and China, whose per capita income then would be 5 to 10 times higher than now, engage peacefully. "If the transformation does not take peacefully and if there is a fracture, either because of economic reasons or strategic reasons which I hope not lead to military confrontation between the US and China or China and India, it will be a different world," he said.