Hailing the reduction in Corporate Tax Rate to 22% for domestic companies and 15% for new companies, FIEO President Sharad Kumar Saraf said that such reduction would attract much needed investment both through FDI route and domestic investment.

The timely move would also help in attracting investment from companies in China who are looking for new destinations for expansion or starting a new venture with an eye on US market, he said.

It will encourage investment in the existing domestic companies also giving them the scale to cater to the huge market of US & China, he added.

The technology companies in small segment may migrate to medium size companies with equity participation from overseas, the FIEO chief said.

The effective rate of 17.01% is very attractive as the similar rate in US is about 21% and in China about 25%. The reduced rate has given further stimulus to investors attracted to India as a market, he added.

Saraf said that the allocation of 2% CSR fund on incubators, IITs, national laboratories and specified agencies engaged in conducting research would not only establish industry academia relationship but would give a push to R&D and product innovation which is need of the hour in exports particularly as India is focusing now on sunrise sectors of exports.