India could become the new China after Delhi's proposed 'blueprint' for attracting investment from companies fleeing Beijing ver the US-China trade uncertainties.
The proposal, tailormade to snag investment moving out of China, is expected to make India the preferred investment destination as international businesses are compelled to make hard long-term choices.
Global investors will be aware that China-centric geopolitical tensions will continue to rise as Beijing aggressively pushes its superpower ambitions amid economic growth that is gaining on the US as the world's largest economy.
Finance Minister Nirmala Sitharaman said in the US that she would prepare a blueprint for international companies that are looking beyond China to make India as their preferred investment destination. She is confident about the pitch that industry leaders contemplating a move out of China are "definitely considering India," a PTI report said.
Sitharaman said the government would proactively meet international industry leaders and invite them to India. "I'd certainly be doing that – go back and design in some way whereby I will identify those multinational corporations, all American businesses or any other country European or a British origin who are moving out of China or who probably are even contemplating," Sitharaman said at a meeting with Indian reporters after the conclusion of her engagements at the annual meeting of the International Monetary Fund (IMF) and the World Bank in Washington.
"I will make a blueprint with which I will approach them and put forward to them as to why India is a far more preferable destination," she added.
The government push could be in specific areas like electronics, lithium-ion battery or any other semiconductors in which India has a developing ecosystem, she said. The finance minister, however, said her decisions would not be purely on the basis of what is happening presently between the United States and China, which are locked in a trade war over discriminatory tariffs.
"That could either aggravate the situation or probably just influence at some level. But the fact remains that there are companies which are looking at relocating for various other reasons also," Sitharaman said. "That is why I gave that little fine line that I'm drawing about companies that would want to locate elsewhere outside of China. Even as I said that I said that not every company wants to lock, stock and barrel get out of China, there are companies which will remain there to service the Chinese market."
She said she is aware that some companies may need to stay on in China to service the domestic market. "After all China has a big domestic market and their purchasing power, consumption style may be very different from what it is in India, but I'm making that margin already that companies will probably be there to service the Chinese market tension or no tension," said Sitharaman.
Some experts suggest a China-centric thread in India's economic expansion push is welcome as the future would only see worsening tensions between Washington and Beijing. India is in a prime position to exploit the widening differences that could be exacerbated as the two headstrong leaders, President Donald Trump of the US and President Xi Jinping of China, cannot be perceived at home as yielding ground.
If India can trap the investments fleeing Chinese turmoil, it would be a boost to Prime Minister Narendra Modi's attempt to make Indian a $5 trillion economy.