India is planning to prepare a blueprint for international companies that are looking beyond China to make India as their preferred investment destination. Union Finance Minister Nirmala Sitharaman on Saturday (October 19) said that industry leaders, who are mulling to get their businesses out of China, are “definitely considering India as the pitch”, reported news agency PTI.
According to the finance minister, it might be important for the government to now meet and invite industry leaders to India. “I’d certainly be doing that…I go back and design in some way whereby I will identify those multinational corporations, all American businesses or any other country European or a British origin who are moving out of China or who probably are even contemplating,” she was quoted as saying.
“I will make a blueprint with which I will approach them and put forward to them as to why India is a far more preferable destination,” Sitharaman told reporters on Saturday. She was speaking at the conclusion of her interactions at the annual meeting of the International Monetary Fund and the World Bank here.
The minister added that this could also be in specific areas in which India has common capacity ecosystem building, whether its electronics, lithium ion battery or any other semiconductors. However, she clarified, the government’s decision is not just going to be purely on the basis of what is happening presently between the US and China.
“That could either aggravate the situation or probably just influence at some level. But the fact remains that there are companies which are looking at relocating for various other reasons also,” she was quoted as saying by PTI.
“That is why I gave that little fine line that I’m drawing about companies which would want to locate elsewhere outside of China. Even as I said that, I said that not every company wants to lock, stock and barrel get out of China, there are companies which will remain there to service the Chinese market.
“After all little China as a very big domestic market and the their purchasing power, consumption style may be very different from what it is in India, but I’m making that margin already that companies will probably be there to service the Chinese market tension or not tension,” the Union minister said.
Sitharaman said that India wants to create a suitable ecosystem for foreign companies that tap the country’s market. “I’m allowing that margin already. Over in about that for those companies, even if they continue to be in China but still would want to produce from elsewhere either to export or to capture a new hub, domestic market like India,” she said.
She further asserted that India is still one of the biggest options to consider for those companies. She added that it is perceived that the opportunities in Vietnam are not that attractive.
“Today, one of the conversations that I was having with some of the bank and the government representatives was that even Vietnam now probably is getting saturated. They don’t have enough manpower to address expansionary programmes of investment,” she said.
“So, given the fact that we’ve given concessional taxation approach to corporate incomes, corporate tax having been brought down and the problems that I’ve just mentioned about Vietnam, there’s a higher chance that those companies which are moving out those investments which want to get out to China will certainly look at India,” Sitharaman said.
Sitharaman gave a clarion call for “concerted action” in the face of global slowdown and also highlighted that the emerging market economies, in particular, face the challenge of achieving economic growth and inclusive development while pursuing sustainable financing.
In this context, she emphasised the importance of countries pursuing structural reform measures to counter the growth slowdown. She re-emphasised the need for G20 to ensure collective action so as to enable global growth to regain pace.
She led the Indian delegation to the G20 Finance Ministers’ and Central Bank Governors’ meeting on October 18 in which, the deliberations centered on international taxation and Stablecoins. On the sidelines of the annual meetings, she held several bilateral meetings including with Chancellor of Exchequer UK, Sajid Javid; Secretary of State for Development of the UK, Alok Sharma; Finance Minister and Deputy Prime Minister of South Korea, Hong Nam Ki.
She also met President of the World Bank, David Malpass and Finance Minister of Russia, Anton Siluanov; Finance Minister of the Kyrgyz Republic, Baktygul Jeenbaeva; Finance Minister of Switzerland, Ulei Maurer; the Australian Treasurer, Josh Frydenberg; Finance Minister of Maldives, Ibrahim Ameer and Senior Minister of Singapore Tharman Shanmugaratnam.
(With inputs from agencies)