PM signals press to attract companies leaving China for India
NEW DELHI: Prime Minister Narendra Modi Thursday marked a major push to boost investments in the country and capture a part of the supply chain that is expected to leave China as global corporations seek to diversify their base after Covid-19.
Modi discussed strategies to attract investment with his top ministerial colleagues, paving the way for a comprehensive strategy cabinet to be formally approved by the cabinet in the coming weeks.
The meeting comes days after the prime minister spoke about the need to make India self-sufficient by following the supply lines of crucial medicines, electronics and chemicals that were affected in February when production was halted around Wuhan, the source of the novel.
Although the government had been working on a China plus one strategy for the past few months, it has picked up momentum amid signs that countries will also encourage their companies to seek manufacturing facilities outside the Asian giant.
Indeed, countries like the United States are already working to accelerate this momentum, and Secretary of State Mike Pompeo stated Thursday that the administration was trying to mesh the supply chains to which both countries (India and the United States) have access, especially in areas crucial to national security.
A sharp rise in wages in China had already led many multinationals to seek alternative bases for production, and India was trying to take advantage of the fever. The global rethink that China is the dominant source of supply in the wake of outrage at its ties to the virus has expanded the potential opportunity.
A key theme of the plan will be a plug-and-play model in industrial estates that has been in process for several months, a facility that will allow investors to identify potential sites to locate a plant. The Department of Industry and Internal Trade Promotion is implementing a GIS-based platform, which currently covers around a dozen states, allowing investors to decide their location.
A single window platform is being installed to allow all central and state authorizations with an electronic tracking and monitoring system. While the portals are already in place, the technology issues are being resolved, an official said. In the Budget, the government had also announced an investment settlement cell, which is a step in this direction.
Furthermore, the government is seeking to provide additional financing, according to an official statement, and officials suggest the money will be used to create new properties and economic zones on the Dholera and Greater Noida lines, which are part of the industrial corridor.
In addition, sources said, the prime minister and ministers discussed the possibility of taking advantage of the comparative advantage that states have and a renewed attempt at a center-state partnership. Therefore, Himachal Pradesh, Uttarakhand and Gujarat, which have a pharmaceutical base, can be leveraged to attract more investment in the sector. Similarly, UP, which has become a base for electronics, can also be used for agricultural industries.