In the aftermath of the coronavirus pandemic, US business companies doing eyes business in China could prefer India as the alternate destination for investment, a view that the US Department of state-supported at the end of April. In a meeting held in the last week of April via the American Chamber of Commerce in India between the representatives of large American companies operating in India and also a senior official of the US Department of State, India’s importance as a potential destination but from shifting business from China was highlighted.
Thomas Vajda, assistant secretary in the Department of State for South Asia, told representatives who attended the virtual meeting that India can quickly find favor as a destination for more of the industrial activities that are currently China-based.
The trigger
Trump has been vocal in condemning China by blaming it squarely for shoddy handling of its COVID-19 outbreak, which has killed millions of people across the world. His constant tirade is likely to exacerbate global trade ties as governments. And also companies move establishments out of Chinato branch out supply chains. Japan has allocated $2.2 billion for helping to shift factories from China’s eyes while members of the EU plan. To remove dependence on China for its supplies.
India’s opportunity
Narendra Modi, the prime minister of India, is also keen to ensure a surge in investment to shore up the economy battered by the worlds’ biggest lockdown across the nation for eight weeks to combat the spread of COVID-19. The investment should help to make up ground for the ambitious target of growing India’s manufacturing sector by 25% of gross domestic product (GDP) by 2022 up from 15%. Creating employment eyes is even a more urgent need to cope with the increasing joblessness due to the pandemic that has left 122 million people jobless.
The move is on
The US government is taking active interest to see things happening in India, as evident from its push to the representatives of several US-based companies under the advice of the government. It is likely to suggest to the Indian government to give incentives that would facilitate the spread of US businesses in India. This would create an immediate environment to attract more businesses to the country. Vajda has assured that the government relations between the two countries would support the initiatives. However, other people who attended so the meeting preferred to maintain anonymity while endorsing the Vajda’s views.
In April, the Indian government reached out to more than a thousand US companies. And also through diplomatic missions overseas to offer incentives for manufacturers willing to relocate their eyes business in India. By moving out of China. India is focusing on food processing units, medical equipment manufacturers, leather and also auto parts makers, and also textiles. Among more than 550 products discussed at the end of April.
The investments could present India with a chance to push through long-pending reforms of labor, land, and also taxes. That has hindered investments over the years. India can gain a place in global supply chains only if it ready to make serious eyes investments. In governance and also infrastructure, says Paul Staniland, an also associate professor at the University of Chicago.