India may become new global manufacturing hub as coronavirus crisis ends

Image courtesy: PTI

New Delhi: The coronavirus pandemic has engulfed the entire world and India too is not spared by the deadly virus, but amid this challenging time, there is an opportunity as China is likely to lose the status of a global manufacturing hub in the post-COVID-19 era, according to experts.

They believe that the Indian economy may become the new manufacturing hub as several international companies, currently based in China, may exit from there. Countries like Japan, America, and South Korea, which have so far been dependent on China, are eyeing India to shift their base. 

Around one thousand international firms currently working in China are planning to make India their new destination. Similarly, about 300 companies have also made preparations to set up their units in India, and have already started their negotiations with the Indian government.

These companies are in different sectors like Mobile Phones, Electronics, Medical Devices, Textiles, and Synthetic Fabrics. The list includes the names of many big companies that wish to shift their business from China. 

1. Wistron Corporation, a subsidiary of well-known iPhone manufacturer Apple Inc

2. Pegatron, a Taiwanese company involved in assembling of iPhones

3. Two South Korean Iron and Steel companies - Hyundai Steel and POSCO

4. America's Electronics and Technology firm, Teledyne 

5. The US pharmaceutical company, Johnson and Johnson

Not only this, but many South Korea companies are also showing their eagerness to shift to India. Japan has already announced a mega package of two billion dollars (about Rs 15,000 crore) for its companies, willing to shift their plants and factories outside China. 

India is attracting international attention because of certain concessions it has already announced for the corporate sector. 

In September 2019, the Indian government reduced the rate of corporate tax from 30 per cent to about 25 per cent, while the same has been reduced to 15 per cent for those companies that want to set up new factories. Notably, India's corporate tax rate is the lowest in Southeast Asia.

Apart from India, international firms are also looking at countries like Vietnam, Malaysia, the Philippines, and Indonesia as an alternative. This is the reason that the Indian government is expected to accelerate Make In India policy after the end of lockdown. 

Organizations associated with the industrial sectors have been asked to contact big companies in the US and the UK, willing to shift their manufacturing units outside China. Negotiations have already started with about a hundred such firms. 

China may receive a major jolt if international companies decide to shift their manufacturing units to countries like India after the coronavirus crisis.