The government plans to offer up to Rs1.68 trillion to attract foreign companies to set up manufacturing units in India. Its believed that the Modi-led government will offer incentives to automobile manufacturers, solar panel makers and specialty steel to consumer appliance companies. It also includes specialized pharma product makers, food processing plants and texile units.
New Delhi, as per reports, has been working on attracting investments to revive the economy. Recently, the Indian economy contracted by a record 23.9 per cent. A report by Dun & Bradstreet, Country Risk & Global Outlook, in August said India could witness a negative growth of 4.5 per cent in 2020 fiscal, but there was a positive possibility of a healthy growth of 6.3 per cent in 2021 fiscal. Arun Singh, Global Chief Economist Dun & Bradstreet, has said that demand will remain depressed in India by unanticipated lockdowns at state level and in containment zones. As such, this also raises uncertainty among manufacturers and suppliers who had planned to resume their operations. To bring about a full recovery from COVID-19 driven economic slump, the central government plans to introduce a phased manufacturing program to other sectors for allowing companies to gradually increase local value-addition.
Moreover, India has an excellent opportunity to emerge as a manufacturing hub, an alternative for foreign companies who for more over decades have footed themselves in China. Reports already indicate that a large number of companies have already initiated talks with Indian authorities wanting to pursue production plans in India in sectors such as medical devices, electronics and textiles. Experts believe the country needs to proactively create and environment that is favorable to global manufacturing ecosystem that offers efficient and highly trained manpower, encourages innovation, allows ease of doing businesses and protects intellectual property.
In these lines, the government plans to attract foreign companies with attractive incentives and details for this is being worked on.