The Indian government is planning to provide incentives to 324 companies, including Tesla Inc. and GlaxoSmithLine Plc, to set up factories in the country in an attempt to cash in on the ongoing trade wars between China and the USA Bloomberg has reported. The proposal is expected to reduce red tape and set the country on its way to achieving a $5 trillion economy.
According to the draft of a document prepared by the Department for Promotion of Industry and Internal Trade and Invest India, the government intends to provide land to these manufacturers along with power, water and land access. Other companies that feature in the government’s plan include Eli Lilly & Co., South Korea’s Hanwha Chemical Corp., and Taiwan’s Hon Hai Precision Industry Co. The government intends to create a ‘land bank’ of sorts for ready-to-move-in industrial clusters, offer investment and location-based incentives among other things.
“While in the initial leg of relocation we have seen companies moving to Vietnam, I don’t think it is too late for India to start making an effort,” said Sonal Varma, chief economist for India and Asia-ex Japan at Nomura Holdings Inc. in Singapore. “India offers a unique advantage of being a huge domestic market too, so it is definitely an opportunity for the government to attract investment,” she added.
As we had reported earlier, India has thus far failed to capitalize on the trade war between the US and China. Vietnam and other countries have benefited greatly as manufacturers looked for alternatives in an uncertain economic climate. Thailand, too, had floated a 50% tax cut for manufacturers looking to flee China.