(Writer is holding Top Managerial Post in Fortune 500 Company and has Vast Experience in the Field of Cross Border Investment and Policy Management)
The question of China’s responsibility in the outbreak of the Corona epidemic is being raised seriously. Many companies are also considering leaving China and moving to other countries. Will India be able to attract investment from China?
The statements of US President Trump are often not taken seriously because of their bravado and disgrace, but their reactions to China are being heard in many countries of the world amid the Covid epidemic. It seems that as soon as everything is done, all the countries of the world will put diplomatic pressure on China for accountability. Recently, many similar things emerged in Germany, Italy, Australia, and Britain. Recently, companies of America and Japan have also expressed their intention to move their investment from China to other places. It is clear that a long phase of rivalry has started in Sino-US relations.
Foreign investment debate not just coincidence
It was in this backdrop that in the meeting of US Chamber of Commerce between the officials of the US State Department and the Indian representatives of American companies, this was discussed in depth. Here special attention was given to those companies who have made up their mind to remove their business from China. In view of the trade war of China and America, these steps have been happening since last year. The India-US Strategic Partnership Forum has also said that about 200 American companies are willing to exit China and investment in India will be a good opportunity for them.
India is not unaware of this movement. Though no formal announcement has been made so far, it is no coincidence that on one hand, Prime Minister Modi has asked the Chief Ministers of the State Governments in their online meetings to make easy and simple foreign investment-related strategies on the other hand. The government’s business promotion committee has started making American investment-related policy. Union Minister Nitin Gadkari has also hoped that the American companies migrating from Covid due to declining credibility of China can be brought to India through joint investment, due to which 20-25 lakh crores in manufacturing sector alone can be invested.
Free trade agreement the cornerstone of investment
This is undoubtedly good news for the Indian economy stuck between the declining economic growth rate and remittance. The Indo-US Free Trade Agreement could have created a good path for these investments. A draft prospect was also being expressed before Trump’s recent visit to India, but discussions are still on. There is no doubt that bilateral economic relations between India and the United States have strengthened over the past decade. And today this figure has crossed $ 142 billion. But this is nothing compared to the Sino-US $ 660 billion figure. Now the question arises that will India be able to entice American companies to invest?
Foreign investment has been in the priorities of the Modi government and under the Make in India policy, the government has opened all the avenues for investment. Investment has also taken place in the last six years, especially in the fields of highway and road transport, energy, and infrastructure, but India has been slower than China and Vietnam. It says, “All the obstacles on the way to the destination.” The case of foreign investment in India is also similar. Governments have policies but no co-ordination, red-tapism, and an endless spate of paperwork. It is clear that in the past years, to save many important projects from this morass, the Prime Minister’s Office has to directly interfere and where PMO help does not come, big projects are sacrificed for regional politics and Babugiri.
Need for cooperation between central and state governments
There is a long tradition of mistrust of foreign investors in India. Political and personal interest, irresponsible investment and economic policies, lack of foresight in the allocation of projects has contributed to this. Whether it is South Korea’s POSCO investment in Orissa or Singaporean investment in the development of Amravati, the new capital of Andhra Pradesh, the attitude of politicians and bureaucracy has tarnished the image of foreign investment in India. This is the reason that despite wanting, today Singapore and South Korea do not want to invest in India only outside the chosen sector. Although American companies may not be treated like Singapore, they will compare investment facilities in India with China, which had given all possible facilities for these companies.
The Modi government has repeatedly spoken of “Ease of Business” and “Make in India”, and has been successful to some extent, but the goal of bringing large-scale American companies to India is to bring Ganga from heaven to earth As it is, for which the central and state governments will have to work together in policy formulation and its compliance. At the same time, without any party politics, a definite, far-reaching, and successful policy will have to be made, a policy that has every tip and every implementation process simple. How vigilant the policymakers of India are for this, it will be known by their success in removing the obstacles in the way.
I want to end this article with the hope that has been provided by Finance Minister’s Press Conferences in which many initiatives are announced which may long way in attracting Investment if implemented in true sprites. Especially Problems related to Land Acquisition is being tried to resolve through making information available on Industrial Information System (IIS) with GIS mapping regarding availability of Industrial Land/ Land Bank for promoting new investments. Other Announcements are equally important like liberalization of Coal and mineral sector, Project Development Cell in each Ministry for coordination between Government and Investor.
I hope that these announcements does not get trapped in Red-Tapism and being implemented at ground to realize Goal of ” Make in India” .
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Disclaimer: Views are of Writer, fab gyan does not own the facts and analysis.