India sees the impact of the epidemic in China as an opportunity to forge ahead and become a world factory.
As the new coronavirus infects millions of people around the world, china faces unprecedented challenges that could shake up its status as the world`s largest factory.
India, close to china, has felt the gift and is eager to take over the manufacturing gap after china`s exit.
India`s transportation minister, Nitin Juddkali (Nitin Gadkari), said in a recent interview that China`s global position has been weakened and India has attracted more investment, as if it had been a blessing in disguise. Uttar Pradesh (Uttar Pradesh) in northern India, with a population similar to that of Brazil, has formed a economic team to attract companies interested in abandoning China.
India is also preparing to allocate a total area equivalent to two luxembourg (about 5000 square kilometers) to manufacturing companies that want to move out of china, according to bloomberg news agency, and india has approached 1000 american multinationals.
The president of India government National Investment Promotion Association —— Investment India (Invest India), Deepak Bagra (Deepak Bagla), told the BBC that India`s efforts to attract multinational companies were ongoing. The new coronavirus will allow many of these companies to speed up their steps get rid of the risks in China as soon as possible.
American-Indian Chamber of Commerce (USIBC) is an influential lobby group dedicated to promoting US-Indian investment. The Chamber of Commerce also said India had greatly increased its voice in attracting investment.
Ms. Nisha Biswar (Nisha Biswal), President of the Chamber of Commerce, who served as Assistant to the United States Department of State for South and Central Asia Secretary of State. told the The British Broadcasting Corporation that "we see India focusing on attracting supply chain in both central government and state government,. "
"Companies that already have factories in India are likely to move out of China the fastest and intend to reduce production in China and increase production in India. "
She added, however, that matters were still under evaluation and that decisions would not be taken in haste.
In the global negative equity problem in the environment, resettlement and deployment of the entire industrial chain said easy to do difficult.
"Many economics these companies face severe cash flow and capital constraints because of the epidemic, so they are very cautious before deciding what to do next ," said independent Rupa Subramanya (Rupa Subramanya). "
Rahul Jekb (Rahul Jacob), former head of the Hong Kong-based branch of the Financial Times 》, which has long watched China`s affairs, believes that India`s government is concentrating available land resources as a step in the right direction, but land alone is unlikely to attract large companies to relocate factories to India.
"The stickiness between production lines and supply chains is much stronger than people understand, and it`s hard to split them in two overnight ," he said. "
"China provides complete infrastructure, such as large ports and highways, top-class labour and sophisticated logistics systems, which are key factors in meeting the strict delivery deadlines that international companies follow in their operations. "
Another reason why India is unlikely to be the preferred location for global TNCs is that it is not well integrated into major supply chains worldwide.
Trump U.S. President says China is not in time to stop the spread of the virus and has an unshirkable responsibility for the new outbreak.
In 2019, after seven years of negotiations, India withdrew from an extremely important multilateral trade agreement consisting of 12 Asian countries, known as the Regional Comprehensive economic Partnership Agreement (RCEP). Such a decision by India makes it difficult for Indian exporters to gain access to duty-free markets with other countries and to offer reciprocity to trading partners.
"Why should I produce in India what I want to sell to Singapore ," Parag Kana (Parag Khanna), author of The Future in Asia, told The British Broadcasting Corporation. Maintaining trade agreements with other countries in a system is as important as getting good prices. "
In his view, global trade was beginning to follow the "on-the-spot" model, with major companies producing close to raw materials rather than outsourcing production and bringing production closer to demand areas, so regional integration was particularly important.
Where is India`s competitiveness compared to China`s supporting infrastructure?
India`s volatile foreign direct investment (FDI) and uneven regulation are continuing problems for multinationals.
From banning e-business companies from selling non-essential goods to adjusting foreign direct investment rules to denying access to less regulated capital from neighbouring countries, there are fears that india has used the epidemic to build a protective wall around it.
In a recent speech to the country, Prime Minister Modi of India advocated a "local voice ". The new stimulus raises the threshold for foreign companies to bid for Indian contracts.
"The stronger the regulations in India, the greater the chances of persuading more multinational companies to open base in India ," said Ms Biswar, president of the US-India Chamber of Commerce. "
So, if multinationals don`t choose India, who will?
For now, says jackbo, vietnam, bangladesh, south korea and TW all benefit from the new crown`s impact on china, south korea and TW are high-end technology and vietnam and bangladesh are low-end.
Because of the increased labor and environmental costs in China, multinational companies began moving production lines from China to these places about 10 years ago. America`s trade tensions in recent years have accelerated relationship slow migration.
According to Hong Kong`s South China Morning Post, since June 2018, the month before the start of the Sino-US trade war, U.S. imports from Vietnam have soared by more than 50 percent and imports from TW by 30 percent.
Indian government agencies are trying to attract more U.S. companies to India.
India was seen as having no benefit in the process, as it had not created the conditions to allow TNCs to export not only to local Indian markets offer products, but also to the world using India as a production base.
In recent weeks, several States have begun to respond to the concerns raised by some deregulation, most notably controversial changes to outdated labour laws to reduce labour exploitation.
For example, Uttar Pradesh and central have suspended important labour protection measures so that factories do not even have to guarantee basic facilities such as cleaning, ventilation, lighting and toilets.
The starting point for such decisions is to improve the investment climate and attract global capital.
"International companies are very concerned about this ," said Jackb. They have strict codes of conduct for the labour, environmental and safety standards of suppliers. "
Some Indian states have even extended basic requirements for plant safety to attract foreign investment.
He warned that the collapse of the Bangladeshi garment factory building in 2013, which included supplies for big retailers such as Wal-Mart, was a turning point. The incident forced Bangladesh to significantly improve plant infrastructure and safety conditions to secure more investment.
"India must follow better standards. These are ideas drawn up on the computer board by bureaucrats completely out of the reality of global trade. "
Yet global anti-china sentiment is heating up as the u.s. moves to efforts to decouple from china and japan allocates money to its own companies to help move factories out of china, councillor britain is under pressure to reconsider Huawei role in five G of networking.
Now, experts say, the time is ripe for broad structural reforms to take advantage of the geopolitical change sweeping the globe to reshape India`s trade relationship. with the world
