India leveraging crisis into opportunities

The coronavirus pandemic has coaxed the world to necessitate strict lockdown measures, resulting in tremendous depression across all formal and informal sectors. The Indian government officially announced its lockdown phase – 1 from March 23, 2020, has brought the economy to major upheaval. The comprehensive shutdown of manufacturing corporations, businesses, industries during this lockdown period has exceedingly steered to supply chain stagnation. 

The prevailing supply chains across enterprises have unfolded over a period of time and are not inevitably the promising outcome for the current and future operation scalability. For instance, customer product supply chains -FMCG, pharmaceuticals, and consumer durables today are fine examples. Naturally, organisations have many layers between manufacturing and end consumer, with many justifications why such a structure developed include poor infrastructure, a distributed international demand impression and low volumes in earlier periods. This was amplified by a distributed hierarchy with many small distributors subordinating between manufacturers and consumers where modern trade and eCommerce platform, have not made a significant influence yet. Even as India has expanded its infrastructure, codified the GST and enhanced its IT connectivity, it’s more complex for it to transform into a more convincing platform with a high degree of consistency.

Despite the troubling times, US corporations running their business in China, on the other hand, are making an effort to explore various opportunities to move their supply chain out of China to select destinations like India, Malaysia and Vietnam. Due to the huge upside in market access and already prevalent business activities, India could likely become a favourable destination for selected healthcare, pharmaceutical, automotive, leather industries to benefit from this ongoing crisis. Its a win-win deal for both US companies and India, as BJP led government mulling to bring radical reforms in land acquisition, Labour Laws, and contemplating on tax- holidays for those partakers expressing consent for moving out their business to India over 3000 crores INR (500 Million USD) estimates.

Uttar Pradesh government had successive video interactions with US-based corporations. The UP government is keenly working on packages and ways to attract fresh investment and companies into Uttar Pradesh territory.

Plug and play approach by Tamilnadu government to woo  investors 

Tamilnadu chief minister Edappadi K. Palaniswami instituted special investment promotion task force headed by the secretary of the state to attract automotive, IT, healthcare firms looking to move out of  China. In addition to it, they are also chipping in to bring investments and companies from the US, Japan, Isreal, Malaysia and Singapore. The government will provide liberal policies, faster clearances and Incentives for the companies interested to invest in TamilNadu. 

Investors considering business sentiments in china gloomy 

China’s increasing wages and intertwined business environment of late have persuaded many companies to look out of various other viable possibilities to set up their production bases. The central government moreover pushing for single-window central and state clearances supported by electronic and tracking mechanisms. In addition, lots of advantage to be offered for Special economic zones on the lines of Noida and Eastern part of India. 

Sources from PMO are optimistic on comparative advantages of the states, which can leverage investments depending upon their working business models and diversities they already hold and establish promising synergy right from the preliminary stage to operational reality of the enterprises.

About the author : Electrical Engineer with deep passion towards AI & deep learning. Also an avid writer who likes to research & write about Geo-politics of US & China. Passionate about free markets & foreign trade . Get to know more about me ..Twitter @anandaragavan

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