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27 APR,2020 | MEDC
Many countries have started withdrawing their investments from China following Covid-19. There is thus, an increasing possibility of China losing its global tag of preferred manufacturing hub, and this could be seen as a blessing in disguise for India. Around a thousand foreign companies are engaged in discussions at various levels with the government of India. At least 300 of these companies are actively pursuing production plans in key sectors such as mobiles, electronics, medical devices, textiles and synthetic fabrics. India needs to rapidly promote itself as an alternative global investment destination for the capital which is leaving China in droves in search of greener pastures. Many countries like Japan, US and South Korea have been over-dependent on China, but Covid-19 has forced them to reassess their approach. With China coming in the global firing line over how it handled the viral outbreak, many major economies are expected to nudge their corporations to relocate production units out of China or set up new units at alternative locations. India needs to take advantage of these developments.Japan, for example, has announced a $2 billion financial aid package for its companies to shift out of China. Many other countries are also expected to follow suit. With the world rethinking its economic philosophy of putting all its eggs in just one basket, if India has its infrastructure in place, it could certainly benefit the country. India has the advantage of not just market size but also geographic location – the heart of South Asia and overlooking a huge ocean named after it. The government needs to focus on speeding up quality infrastructure development throughout the country, and assuring foreign investors that India is the right place to park their funds for the medium to long term.India is working determinedly to achieve the $5 trillion economy target. Thanks to the farsighted policies of the RBI and the government, India has experienced minimum economic disruption despite the global turmoil. The pandemic is being handled reasonably well. Corruption and cronyism are being strictly dealt with. India has also improved by 77 ranks in the Ease of Doing Business rankings in just five years. All these factors are in favour of India emerging as a viable alternative to China. Of course, we still have a long way to go. Covid-19 has given us a unique opportunity to thoroughly restructure our economy. We should do so in such a way that it attracts maximum global investment.
*Photo Credit: Google
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