Bloomberg quoted an Indian official saying that in April, the government approached more than 1,000 US companies and offered incentives to businesses considering moving out of China.
US President Donald Trump’s blaming of China for its handling of the pandemic is expected to worsen global trade relations, as companies and governments move resources away from China to diversify.
For Indian Prime Minister Narenda Modi, increasing investment cash flow will help revive the economy that has been locked down for the past 8 weeks due to the pandemic.
President Donald Trump shakes hands with Prime Minister Narendra Modi at Motera Stadium in Ahmedabad, India on February 24.
This is also an opportunity to help India accelerate the long-stalled land, labor and tax reform process, which has held back investment for many years.
`Businesses will find many opportunities in India to gain a foothold in the global supply chain. But this requires the government to invest seriously in infrastructure and governance,` Paul Staniland – lecture
Indian officials have convinced businesses that even though total costs are higher than China, they are still cheaper than the US or Japan in terms of land and skilled labor.
India’s Commerce Ministry is seeking input from US businesses on changes needed to make the country’s labor and tax laws more company-friendly, an official said.
India hopes to attract US companies in the field of medical products and equipment.
India’s efforts come as many companies have chosen Southeast Asia over India as an alternative destination as the US begins a trade war with China.
Last month, US Secretary of State Michael Pompeo said the US was working with India, Australia, Japan, New Zealand, South Korea and Vietnam on how to `restructure these supply chains to prevent the current situation from recurring.`
India last month partially lifted the export ban on hydroxychloroquine and paracetamol, at Trump’s request.
`India is a large market compared to some Southeast Asian countries. Therefore, they will be more attractive to investors looking to move production out of China,` Ajay Sahai – General Director of the Exporters Association
Some states have ensured that the supply chains for foreign manufacturers remain open during the country’s blockade.
`A large amount of US capital is looking for overseas locations. And India has spoken up,` said Mukesh Aghi – Chairman of the US-India Strategic and Partnership Forum. `Companies also realize that
