Indian business environment "complicated", says Singapore PM

NEW DELHI: Singapore Prime Minister Lee Hsien Loong today said India's business environment is "complicated" for investors who want policy stability.

"I think India's environment is complicated," Lee said at a luncheon meeting with India's industry leaders organised by CII, FICCI and Assocham here.

Singapore Prime Minister who is on a three-day visit to India said when investors take a decision they want stability and "they want to have reliable partner. They look at the prospect and possibilities. That's the way all businesses happen," he said answering a question on how to improve business climate in India.

Some global industry associations and investors have expressed apprehensions over business environment in India following announcement of controversial General Anti-Avoidance Tax Rules (GAAR). Besides, retrospective tax as in the case of Vodafone has also added to uncertainty among some investors.

Asking India Inc to set up global base in Singapore, Lee said the countries have to "do a lot more to enhance bilateral relations". Already 4,000 Indian companies are currently operating in Singapore.

He said the rate of corporate tax in Singapore is far less than in the US and UK, which has helped Singapore a favourite investment destination."We are in the process of setting of a board of investment to help investors in executing the projects," Lee said.

Lee said that there was a need for increasing frequencies of flights between India and Singapore.

Singapore has emerged as the most sought after destination for foreign direct investment by Indian companies, which invested over USD 500 million there, accounting for about a fourth of the country's total outward investment of USD 2.35 billion only in May.

The two countries also have a bilateral free trade agreement which has helped the mutual commerce growing to near USD 20 billion.