Positive Signs for Indian Industries by Western Countries During Covid-19
Undoubtedly, COVID-19 has taken a toll on not only human life but also on industries by halting the production and distribution of its goods and services across the globe. Perhaps, it is one of the worst pandemics in history, industries have been badly impacted with some of them reporting to have zero production in the last 3 months. For countries like India where the economy is a developing one, numerous challenges lie in front of it. Companies are deciding on ways and formulating strategies that would help to revive the economy as soon as possible. Amongst all these, some countries have started their production and have signaled a relief for the Indian industries.
The products at the industrial factory for sale have plunged at all new low and experts say that it might take a couple or three quarters to get things back on track. There has a drastic bend in the trend as for the first time India’s merchandise export witnessed a sharp downfall since 2008.
With all the gloomy situation around, positive signs are coming as well for the Indian industries. Some of the companies are deciding to move out of China and put their manufacturing factory building in India. With immense labour force and potential, India has emerged as one of the global hotspots for companies based in western countries. The government- both central and state - is leaving no stone unturned in grasping the opportunity and turning things in favour of them. The following are some of the initiatives that have made western companies show interest in India for investment post-COVID-19--
- - Developing land of approximately 4.6 lakh hectares in industrial areas for factory building
- - Tax reforms
According to a local daily, as many as one thousand companies are in discussion to set up their base in India. India is now looking for an FDI based manufacturing investment where export would be maximum like that of China which would not only spruce up the revenue collection but also open millions of job opportunities.
What has Changed Things in Favour of India?
Undoubtedly China has always remained the hotspot for the companies to set up their factory building because of the favourable and attractive FDI policies and cheap labour force apart from infrastructure, utilities, and logistics. However, over the last few years, things have been souring for China and have turned unfavourable. One of the top reasons being the USA-China tariff war besides a feeling of supremacy & geopolitical issues. This created uncertainty and even the leading MNCs with factory building in China became suspicious regarding both production and expansion apart from business viability. And the latest outbreak of the pandemic has added salt to the wound and has catalyzed the movement.
India: The Next Global Hotspot for the Western Companies
With the 1991 economic reforms, India has opened its doors for all sorts of investment. With the passage of each year, the transformation has been brought as per the requirement. Since then, many companies have put up their factory building in Mumbai- India’s financial capital. In addition to this, the areas in the vicinity have been developed in order to streamline the movement of the goods and services. For example, Bhiwandi has transformed into the warehouse capital of India from being the textile hub.
India has also come along a long way in bringing in trade. With making changes in setting up an industry to purchasing industrial factory for sale, India has improved a lot in Ease of Doing Business Index. This has been a point of attraction for global businesses inviting foreign investors.
Post COVID-19, experts believe that companies have developed a sense of mistrust and that is compelling the companies to look for other spots for investment.
Experts say that this geo-economic shift post-COVID-19 is a great opportunity for India. The opportunity should be properly utilized for the benefit of the country.