India is reportedly making fast moves to utilize the opportunity of attracting US companies exiting China.
As the sources say, the Indian Government has reached more than 1,000 US companies in April 2020 directly and through overseas missions.
Under the process, the Indian officials are also luring US companies with manufacturing incentives.
The government has medical equipment suppliers, food processing companies, textile, leather and auto component makers in the priority list.
During these meetings, the officials have discussed more than 550 products.
Medical devices giant Abbott Laboratories is one of the leading firms approached.
Various companies are already preparing to exit China after the US President repeatedly blamed China for COVID-19.
This is expected to worsen the global trade ties, as evident in Japan exiting its factories, and the EU decided to cut down dependence on China.
India Promises Favorable Environment
This is an opportunity for India that is already suffering economic losses due to the 8-week-long lockdown.
Now, the goal ahead for India is to address unemployment and manufacturing activity.
This situation will present an opportunity for the Center to move many long-pending land, labor and tax reforms.
“There are opportunities for India to try to gain a place in the global supply chains, but this will require serious investments in infrastructure and governance. India has tough competition from elsewhere in South and Southeast Asia,” says Paul Staniland, an associate professor at the University of Chicago.
As the sources say, the Indian officials have informed companies about India’s readiness to ease tax and labor reforms.
One of the officials informed that the trade ministry also sought companies’ feedback on changes in Indian reforms to create a business-friendly environment for them.
“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,” says Ajay Sahai, Chief of the Federation of India Export Organizations (FIEO).
He says the Indian Government should also give a clear guarantee that the government will not introduce retrospective tax amendments.
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