New Delhi: Seeing a big opportunity in Sino-US trade war, India has identified some of the global manufacturers across various sectors who could be approached for making investments in the country.
They could be persuaded to manufacture items that are being subject to higher import tariff from the US as they originate from China. Some of the areas in which these global firms could invest are telecom, automobile and pharmaceuticals. iPhone maker Apple and Taiwan-based contract manufacturer Pegatron Corp are some of the companies that India is eyeing for setting up their facilities.
The recent trade conflict between US and China with both countries raising tariffs, taking a tit-for-tat approach, have increasingly been making the trade of goods worth billions of dollars unviable. This has disrupted supply of global suppliers which used China as a hub for manufacturing.
As a result, some of these manufacturing giants have started looking for new countries where they could move their investment. Vietnam and Thailand have seen some of the investment flowing in and India could emerge as major manufacturing destination.
“A plan has been put in place to attract companies leaving China owing to trade war concerns,” said a Finance Ministry official aware of the development.
Presenting the Union Budget for FY20 last month, Finance Minister Nirmala Sitharaman had said that in order to boost economic growth and ‘Make in India’ programme, the government will launch a scheme to invite global companies to set up mega manufacturing plants in sunrise and advanced technology areas such as semi-conductor fabrication (FAB), solar photo voltaic cells, lithium storage batteries and laptops.
Nirmala Sitharaman had said that companies setting up mega units would get investment linked income tax exemptions under section 35 AD of the Income Tax Act and other indirect tax benefits.
Talking on this aspect another official said, “On budget announcements the government is moving swiftly.”
In what is expected to attract global players to invest in India, the government has eased foreign direct investment (FDI) norms in digital media, mining and single-brand retail. The rules for local sourcing have also been relaxed.
It should be stated here that several Indian officials met August 14 and discussed a list of ‘target companies’. A list has been made which also has the names of the Taiwan-headquartered contract manufacturer Pegatron Corp, Foxconn and Wistron Corp, said sources.
Amid suggestions that India is late to capitalise on the trade war, ministries have been asked to submit their policies and incentive structures to ‘Invest India’, the country’s foreign investment promotion agency. Nine sectors including electronics, autos, pharmaceuticals and telecoms will be targeted.
A ‘complete package’ detailing market factors and Indian incentives on offer will be readied for presenting to potential investors, according to sources.
Agencies