Despite its negative implications, many experts feel that the outbreak of the Coronavirus has created a unique opportunity to bring new business investments to India. They also contend that the country needs to put forth a concerted effort to attract new companies and investments that would create new jobs and generate economic wealth. Ultimately, the goal would be new India company incorporation and promoting “Made in India” products. With improved capabilities and advanced technological skills, India under Modi’s leadership is on the cusp of being in the limelight globally.
However, certain steps must be taken to entice companies away from China. Some of the experts are of the view that with many companies looking to move base elsewhere from China, will find that India is a better place to do business with the multitude of benefits the Modi government has initiated to help improve the ease of doing business.
Many experts contend that the key enticing companies to invest in India is improving contract enforcement and upgrading the country’s infrastructure. The impact seen from the COVID-19 pandemic, is the fact that many countries are looking for alternative manufacturing sites in order to increase their supply chains. When you take India’s lack of bureaucratic red tape, minimal labor costs, and reduced corporate taxes into consideration, the country is on the verge of being the next global manufacturing hub.
With India’s improved tax regimen and reduced taxations, it will help in attracting investments by companies looking to manufacture their products overseas. The tax sops will benefit both India and the overseas companies looking to migrate from China. By improving and seamless integration of FDI policies and trade regulations, India is coming to the forefront runner as a manufacturing hub for various companies and industries.
With more companies planning to move out of China, it holds potential for India to tap into the gap and offer its trade and manufacturing know-how.
Additional Considerations
In order to promote new company formation in India and present companies with an alternative to China-based operations, the Indian Government will need to take certain measures in order to accomplish this goal including:
- establishing a mechanism for laws related to commercial and foreign exchange
- overhauling their power utilities
- putting a contract enforcing mechanism in place by creating specialized commercial courts
In addition to these measures, the government could also consider the reduction of certain related costs such as stamp duties. India has been provided with a unique opportunity due to the Coronavirus and the impact it has had on the global economy. It has literally opened the door for more foreign companies to establish their base of operations in India.
