China's COVID-19 loss: Now, international companies show interest in India

A chance for India to wean businesses away from China and bring them home. In fact, foreign businesses based in China want to move out. They are looking at India as their new home. Not one or two but as many as 1,000 companies have reached out to India.

They are engaged in discussions with Indian officials at various levels. At least 3,00 companies are actively pursuing production plans. They belong to industries and sectors like mobiles, electronics, medical devices, textiles and synthetic fabric.

Korean companies are making the first move. Reports saythe Korean consulate in Chennai has received a number of requests. Two requests are from iron and steel companies and another one from the hospitality sector.

Some startups have also shown interest in moving from China to India. India is being seen as a solid alternative and as a global manufacturing destination.

The coronavirus outbreak has exposed how lopsided the global supply chains really are. Companies want to reduce their dependence on China now and India is emerging as a viable option.

So which companies could come to India? There are reports that give some clear indications. Apple's manufacturing partner Wistron corporation is reportedly interested in shifting to India. The company that assembles the iPhone is also considering India. Posco and Hyundai steel are some South Korean names doing the rounds.

The Indian government is keen on capitalising on the shift. Delhi is expected to make moves to attract more foreign companies. Reports say the government is planning an aggressive "Make in India" push after the lockdown. Indian minister Nitin Gadkari has already given a signal.

He has urged industry bodies to attract top companies from the US and the UK backing the idea of more joint ventures and assuring the government's support. The minister said permissions will be given on "war footing".

India became an attractive option after the cut in corporate taxes. Last year, the corporate tax was reduced to 25 per cent for the new manufacturing firms, its as low as 15 per cent. This is an attractive proposition, but it's not enough. Investors have hesitated to move to India in the past. They blame the changing policies and red tape.

India will have to overcome these challenges if it wants to attract businesses away from China. There is competition too. Vietnam, Malaysia, the Philippines and Indonesia are some of the other alternatives that companies are considering. India may need to do more to attract big investment and the country is reportedly willing to offer incentives to foreign businesses.

The Prime Minister's office, Niti Aayog and other government agencies are working on a plan. The government plans to set up dedicated groups. They will directly engage with the firms that might want to diversify out of China. In fact, New delhi is said to have already reached out to 100 companies.

Incentives like capital expenditure benefits could be offered to companies looking to shift but it might take some time for these companies to make up their minds.

The coronavirus outbreak and the lockdowns have killed demand. Major businesses especially business to consumer companies are practically shut. At the moment, India's fortunes are also tied with the global economic revival if Delhi makes the right moves, at the right pace, it could well emerge the winner.