PM Modi signals push to attract firms that exit China to India
The corona pandemic has not only affected the entire world devastatingly, but also led to a special prophesying opportunity in the near future for India and other countries. This opportunity is nothing but ‘Taking over of the global manufacturing hub of China’. But you might have a question in mind ‘How is it possible and when it can be done?’ As per the experts’ advice, the Indian economy will showcase many opportunities after the end of COVID-19 lockdown.
Since many of the International Companies present in China are planning to exit from China. Companies from Japan, the USA, and South Korea which depend more on China and its products are planning to move their set-ups to India from China. As per the different economic reports, around 1000 international companies have decided to establish their units in India after exiting from China. These companies are related to sectors like mobile manufacturing, electronics, textiles, and synthetic fibers are majorly seeking this opportunity by closing their business in China and starting with the same in India.
Many of the popular MNC’s are willing to operate only from India. People might believe that the World will suffer from the economic recession, but in another way, India has a great opportunity to increase their economic standards after this lockdown scenario. Even the companies in South Korea seem to be very interested to exit their companies from China and decided to seek India for their establishment. Japan has already announced its support of around 2 billion dollars to the companies, who are willing to establish their units in other countries like India other than China. Many developed countries are choosing India to establish their companies other than China, because of the low laid taxes for corporate by the Indian Government.
Indian Government imposes very less corporate taxes in entire Southeast Asia. For example, the corporate tax for other countries is more than 30% whereas in India it is around 25.17% for already established companies and 15% for any newly started companies. This is the major attraction for highly developed countries like the USA, Japan, South Korea, etc. to set-up their companies or units in India. Other than this, India is well-known for its robust middle class that helps in developing a potential market for their products. It is also equipped with abundant skilled and semi-skilled labor that serves as the major manpower for the manufacturing units.
Apart from India, other countries like Vietnam, Philippines, Indonesia, and Malaysia could also be an alternative for them to establish their set-ups apart from China. So, India is planning to speed up the process as per the ‘Make in India Policy’ which was launched by Govt. of India on 25th September 2014. So, the Industrial Sector Associated Organizations will direct the major companies in other countries like the USA, Britain, etc. who seek to establish their manufacturing units in India after they exit from China.
As of now, it is estimated that more than 100 companies have consulted so far which makes India a ‘New Manufacturing Hub’ giving space for establishing more industries and in turn providing millions of employment opportunities that contribute to economic development. To make this happen, the Indian Government has to provide all the facilities and resources required to establish their units or manufacturing set-ups within a short period. It also needs to provide sector-specific business-friendly regulations, easy availability of land in SEZs, a simple labor code, tax breaks, along with ready to move-in facilities, and other incentives which will ensure their establishments rather than the other competitive destinations in Asia.
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