The Union Minister for Communication & Information Technology Mr. A. Raja has invited NRI investments to tap the high potential in rural telephony, expansion of broadband and the IT sector.  He disclosed that under the semi conductor policy announced in 2007, the Central Government has received 17 proposals amounting to a total investment of Rs. 1,57,000 crore. The Minister was speaking at a regional session of Pravasi Bharatiya Divas being held in Chennai. 

The following is the full text of the speech: It is a pleasure for me to be amongst you and associate myself to a very important event in India i.e., “Pravasi Bharatiya Divas convention 2009”.   India always has had very close ties with US and therefore, regional session titled “USA” will bring in a lot of synergy between India and US which will eventually help in increased mutual co-operation, better industrial ties, and removing the trade barriers.

Hon’ble Prime Minister Dr. Manmohan Singh, during the inaugural session of the convention, has already presented his vision for the close co-operation between the two countries. Traditionally, NRIs have been playing a very vital role in connecting India through globalization and has been playing a key role in development of India.  Their efforts in infusing the capital in the country and transferring the technology in many key sectors are laudable and needs appreciation.  I am sure that their continued support and efforts will definitely put India on top of the globe in terms of economic development.

The telecom sector has been recognized as one of the major drivers in the economic growth of the country.  In recent past, India has achieved a remarkable growth in telecom sector and has become the second largest wireless network in the world after China with over 350 million mobile connections.  India is also the fastest growing telecom market in the world with an average addition close to 10 million subscribers per month.  Recognizing the potential in telecom sector, India is now the most sought after destination for investment in the telecom industry worldwide.  As a result, Foreign Direct Investment inflow has gone up from US$ 478 million in 2006-07 to US$ 1261 million in 2007-08.  With our proactive policies, we have been able to provide state-of-the-art world-class infrastructure at globally competitive tariffs and reduced the digital divide by extending connectivity to the unconnected areas.

Although we have been able to achieve tremendous growth in voice communication, another important area which still has a huge growth potential for propelling the country to the next level of connectivity - from voice to data is the expansion of broadband.  With our recent concerted efforts, we have been able to double the broadband connections in last one year and reached a figure of 5 million broadband connections representing a modest broadband density of 0.5%. Our targets of broadband are to achieve 20 million connections by 2010. Broadband expansion thus holds the key for the next wave of investment option in Indian telecom sector.  I am sure that those who missed the opportunity in telephony will definitely not like to miss this golden opportunity.  I would urge all our NRIs to join, participate, and share the growth in this important area and help in transforming the masses of our country into educated and informed society.

We have recently announced the policy guidelines for 3G Broadband Wireless Access services for the first time in the country. The allotment of spectrum for 3G and Broadband Wireless Access (BWA) services will be through auction route.  An electronic auction system has been developed and the auction for 3G spectrum will be held soon with the help of an expert agency that has already been selected.  BNSN and MTNL have already been allotted 3G and BWA Spectrum with a view to ensure early roll out of 3G and Wi-Max services in the country.

The talent pool of India is spreading all across the world.  Time is now ripe for Indians to assume a leadership role from technology adopter to the technology leader.  In telecom sector we have a special requirement especially for rural and remote areas.  An indigenous R&D would be able to create solutions to meet India’s unique need in telecom sector.  To bridge the gap in indigenous technology,  we have taken a unique initiative of setting up of “Telecom Centers of Excellence” in our most prestigious academic institutes at IITs, IIM Ahmedabad and Indian Institute of Science Bangalore in Public Private Partnership mode to embolden the R&D efforts.  These centers have identified important projects in association with the industry and are working to generate a skilled talent pool, cutting edge research, customer centric regulatory framework and innovative business models for rural India with the ultimate vision to extend the education and economic benefits to the poorest of the poor through telecommunications.  I would urge you to tie up with our centers of excellence and expand the horizon of knowledge in telecom domain.

Although Indian companies like Infosys, TCS, Wipro have made waves in the world in IT Sector but India lacks in manufacturing of IT hardware.  To encourage investment in IT sector, Government of India announced a Semiconductor Policy in 2007.  Under this Scheme, Government is providing special incentives in the form of capital subsidy of 20% for Units in SEZ and 25% for Units outside SEZ on the total investment.  This Special Incentive Package is available up to 31.3.2010.  Details of the scheme are available on the website of the Department of Information Technology (http://mit.gov.in/download/guideforsips.pdf).  So far under this Scheme, Government of India has received 17 proposals amounting to a total investment of Rs. 1,57,000 crore.  These proposals include investment in semiconductor wafer fabrication, TFT-LCD Panel and solar photovoltaic.  I urge all NRIs to take advantage of this scheme by bringing investment in the country and help India in leapfrogging in the field of manufacturing of IT hardware.

USA is a major trading partner of India. It is the third most important source of FDI inflow into India and a major destination for software exports from India.  10% of PIOs currently outside India are in the USA and have made outstanding achievements, particularly in IT sector and large number of companies in Silicon Valley are owned by them. NRIs from USA have contributed very significantly to foreign direct investments inflow into India.  To encourage further investment in the country, the Government of India has set up a Working Group on Information and Communication Technologies in order to explore ways to enhance investment and address regulatory mechanism to maximize development in ICT sector.  I hope this will further help in increasing the flow of FDI in India.