08 May 2020, 02:41 pm By Rohit Sindhu
India luring businesses shifting from China, more than 1,000 MNCs are in touch

India is in touch with MNC Companies looking to shift production and manufacturing lines out of China. As per report India is luring US MNCs & several other businesses who are planning to shift from China and nearly 1,000 businesses in several sectors are in touch with Modi Government amid increasing blames on China for not making world aware about the Coronavirus as US President Donald Trump said in his statement. Trump has constantly been blaming China's government for hiding the virus and letting it spread all across the world. Had China been more accountable about the existence of such kind of virus, the economies would not have lost their thousands of people, said US President in his briefing.

Taking the advantage of the US-China bitterness, India has moved steadily and in contact with several businesses related to Food & Processing, Medical Sciences & Equipments, Online retail & Infrastructure Development sector.

India luring businesses shifting from China

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.

US President Donald Trump's allegations on China will worsen the international ties between countries in coming years and most companies will remove their bases of China where India can become a central point to incoming investments. Japan has earmarked $2.2 billion to help shift factories from its neighbor, while European Union members plan to cut dependence on Chinese suppliers.

India is more suitable in terms of getting cheap labour and availability of land to set up operations . 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 luring businesses shifting from China

Indian officials have assured that they will consider making some amendments in labour laws and have asked for detailed descriptions of changed required from US companies to make some of the country's laws more favorable to accelerate investment.

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Indiais 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.