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Home » COVID-19 » An Opportunity amidst the Covid-19 Crisis – India to Emerge as a Manufacturing Superpower

An Opportunity amidst the Covid-19 Crisis – India to Emerge as a Manufacturing Superpower

Posted: 11/05/2020
Category: COVID-19

The Chinese economy has suffered a double blow recently. The trade war with the US sent companies looking for alternative supply chains. And, now, the coronavirus outbreak has caused businesses looking for manufacturing units elsewhere.

These two significant disruptions, along with the need to decouple manufacturing, have led global brands to look for alternative manufacturing hubs outside China. This presents a huge opportunity for India, an equal-weight competitor to China, in terms of economic potential and population.

A recent Business Today report states that nearly 1000 global companies have spoken with Indian authorities looking to relocate their plants and offices here. Nearly 300 companies in industries ranging from medical devices, electronics, mobiles, synthetic fabrics, and textiles are actively seeking to set up units in India.

The shift in manufacturing plants and factories out of China to other Asian countries is not a new development. The trend has been observed even before the Covid-19 outbreak. To capitalize on this shift, India plans to offer various incentives to companies relocating from China.

In his recent discussion with state chief ministers, the Honourable Prime Minister Narendra Modi urged Chief Ministers to pursue firms looking to relocated outside China actively. The government has introduced various schemes like "Make in India" to woo firms moving away from China.

Additionally, China's mishandling of the Covid-19 pandemic puts it in an unfavorable light among world nations. The credibility of China in the global community has taken a severe hit.

Secondly, the lockdown of the nation due to the pandemic has affected global supply chains drastically. To give one example, major Japanese automobile makers like Toyota faced a massive shortage of engine parts and accessories, as Japanese firms rely heavily on Beijing for these.

Opportunities Ripe for India


opportunities-ripe-for-india

Due to the significant problems plaguing China, India is being viewed as a preferable alternate manufacturing hub. The global opinion is that India could emerge as a critical investment destination, post-Covid-19. Several states like Uttar Pradesh, Gujarat, and Tamil Nadu are attracting global investors, by offering various incentives. Several countries, including Japan, have appreciated the multiple steps promoted by the Indian government to attract investors.

Yogi Adityanath, the Chief Minister of Uttar Pradesh, recently conducted a video conference with several American investors. Currently, the UP government is working on finalizing a package to attract manufacturers to the state.

Similarly, Edappadi K Palaniswami, the Chief Minister of Tamil Nadu, has set up a dedicated investment promotion task force to attract multinational moving out of China. The task force headed by the Chief Secretary is trying to attract companies from the US, Korea, Japan, Taiwan, and Singapore. The government has assured companies that it will provide special fast-track clearances and incentive packages to make it easy for them to relocate here.

What do we need to do?


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To make the best use of the opportunity, the onus lies on states to attract multinationals looking for an alternative manufacturing base. States have to make it easy for companies for – land acquisition, social and other infrastructure, and various labour laws.

States have to think out of the box to attract investments instead of letting them flow into our Asian neighbours like Vietnam and Bangladesh. States can set up self-contained industrial zones. These zones can be earmarked with specific spaces for social, residential, educational, commercial, and manufacturing infrastructure all within the enclave.

Other factors like effluent treatment plants, single-window entry, fast-track clearance can help companies get started at the earliest. Additionally, states can provide special residential zones for expatriates at world-class levels. By offering various ways and supportive infrastructure to enhance productivity, India can leverage the existing opportunities. Additionally, India needs to woo companies that are not looking to shift entirely out of China but make certain parts and accessories elsewhere.

A recent survey by QIMA, an auditing firm, reveals that 80% of American companies are looking to move business out of China, and 67% of European manufacturers are planning to relocate elsewhere.

The Future Looks Promising for India




These several factors indicate that India has the vast potential to attract global investments in manufacturing. With the WHO praising India's efforts in handling the Corona pandemic, India can restart the economy with vigour by attracting foreign manufacturers.

As one of the leading manufacturers of pumps and systems, Sintech offers world-class products for all industries. To know more about our products, get in touch with our sales team. With the future looking bright, Sintech hopes to get back in operation, continuing to offer world-class products and impeccable services.

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