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200 US companies are planning to move their manufacturing bases from China to India

Akshay Narang by Akshay Narang
28 April 2019
in Trending
US, India

(PC: Indian Express)

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In what comes as a major shot in the arm for the Indo-US relations, it has been reported that about 200 US companies are seeking to move their manufacturing bases from China to India after the ongoing Lok Sabha polls. These firms are reportedly looking at India as a fantastic opportunity as an alternative to China. The US-India Strategic and Partnership Forum’s (USISPF) President Mukesh Aghi spoke about this development and said that the companies are talking to them about how to go about setting up an alternative to China in the form of India.

Aghi also stated that the advice of the USISPF to the new Indian government would be to accelerate the pace of reforms and ensure transparency in the decision making process. He stated, “I think that’s critical. We would advise to bring more transparency in the process and to make it more consultative because in the last 12 to 18 months, we are seeing US companies look at some of the decisions being made, either e-commerce or data localisation, as more domestic-oriented than global.”

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Aghi suggested that the agenda of the new government should be to accelerate reforms, ensure greater transparency and engage more in order to attract greater foreign investment. He added, “We need to understand how we can attract those companies. And that means all the way from land issues to customs issues to being part of the global supply chain. Those are critical issues. There’s a whole plethora of reforms that need to go further down, and I think that is also going to create a lot of jobs.”

As per Aghi, Mark Linscott, the former Assistant US Trade Representative for South and Central Asian Affairs, is working with the USISPF member companies in order to come up with recommendations as to what India needs to do to enhance its exports and work up from that perspective. The USISPF president also said, “One recommendation, which I strongly believe is going to help India is that we should now start thinking of a Free Trade Agreement (FTA) between India and the U.S.” He further added, “I think if India is concerned about cheap goods coming from China, an FTA will eliminate that need. You can put barriers to Chinese goods and still have the U.S. providing access to the Indian market and Indian companies having more access to the US market, and issues like GSP would diminish.”

It is very clear that the US companies see India as a strong alternative to the communist giant. The economic reforms initiated by the Modi government have transformed India into a viable destination for foreign investment. A massive launchpad for a big reforms spree has been created as far as the post election phase is concerned.

Tags: Indo-USmanufacturing sectorreforms
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