Coronavirus is an opportunity for India || क्या कोरोनावायरस से भारत को फायदा होगा ? || COVID- 19 Covid-19 is an opportunity for India
1000 companies to move from China to India
Are companies coming from China to India?
1000 companies coming from China to India.
Coronavirus impact on India.
Why the Covid-19 crisis is actually an opportunity for India ?
The government in April reached out to more than 1,000 companies in the U.S. and through overseas missions to offer incentives for manufacturers seeking to move out of China, according to Indian officials who asked not to be identified, citing rules on speaking with the media. India is prioritizing medical equipment suppliers, food processing units, textiles, leather and auto part makers among more than 550 products covered in the discussions, they said.
Trump’s move to blame China for its handling of the Covid-19 outbreak, which has killed more than a quarter-million people worldwide, is expected to worsen global trade ties as companies and governments move resources out of the world’s second-largest economy to diversify supply chains.
For PM Modi, a surge in investment would help shore up an economy battered by an eight-week nationwide lockdown to control the Covid-19 outbreak, and help him make up ground hitting a target to grow its manufacturing sector to 25% of gross domestic product by 2022 from 15%. The need to create employment is now even more urgent after the pandemic left 122 million people jobless.
It could also present India with a chance to finally push through long-stalled reforms on land, labor and taxes that have hindered investment for years. Modi’s second term has been marred by nationwide protests and slow growth since his party scored a landslide election victory a year ago, presenting a risk for companies planning to move.
“There are opportunities for India to try to gain a place in global supply chains, but this will require serious investments in infrastructure and governance .India faces tough competition from elsewhere in South and Southeast Asia.”
Officials have told companies that India is more economical in terms of securing land and affordable skilled labor than if they moved back to the U.S. or Japan, even if overall costs are still higher than China. They have also offered an assurance that India will consider specific requests on changes to labor laws, which have proved a major stumbling block for companies, and said the government is considering a request from e-commerce companies to postpone a tax on digital transactions introduced in this year’s budget
“My read is that the network, if it pans out, will look to India and Vietnam to replace China in the global supply chain network,” said Derek Grossman, researcher at the Washington-based RAND Corporation who held positions in the U.S. Intelligence Community for more than a decade. “This would be a rough fit in terms of replacing China’s immense manufacturing capabilities, but perhaps the U.S. has high hopes that India and Vietnam can quickly ramp up to at least equal Chinese capacity.”
“India is a bigger market than Vietnam or Cambodia so it should be a bigger draw for investors looking to move operations out of China,” said Ajay Sahai, director general and chief executive officer of the Federation of Indian Exporters. “But apart from ensuring land, water and sewerage, the most important change India needs to make is to give a clear guarantee that the government will not introduce retrospective tax amendments.”
Some states including Maharashtra have ensured that supply chains for foreign manufacturers remained functional through India’s national virus lockdown. Others like Tamil Nadu in the south and Uttar Pradesh in the north have offered concessions for those planning to move.
“There’s abundant capital in the U.S. that’s looking for geographies outside, and we can see India responding,” said Mukesh Aghi, president of the U.S.-India Strategic and Partnership Forum, a Washington-based group that advocates for policies that further business ties between the countries. “Companies realize that while large supply chains in China may have been economical, there’s no point in keeping all your eggs in one basket.”-Bloomberg
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