KOCHI: Taking advantage of the crisis in China's real estate sector, tensions with Western countries and political crises in West Asia, the central government has started an effort to attract more foreign investment. Taking advantage of the changing political conditions in the global arena, various ministries have been directed to change policies to gain the confidence of foreign investors to emerge as an alternative hub for manufacturing. Due to China's restrictions on companies including Apple, efforts have been made at the government level to highlight India as an alternative investment centre for companies in America and Europe. The government is planning to make major changes in labour and finance laws to make India a potential investment destination for manufacturing.
A democratic governance system, freedom of the media and a large consumer society will help inflow of capital investment into India, says leading economist Kaushik Basu. According to the study report of the international financial agency Barclays, India can surpass China and become the leading economic power in the world if it can increase its GDP growth continuously in the next three years.
Meanwhile, the International Monetary Fund (IMF) has estimated that India's GDP will grow by 6.4 per cent in the current financial year, taking into account the good recovery in the financial sector. Analysts expect that the West Asian crisis is likely to be beneficial, just as the Russia-Ukraine conflict has opened up many opportunities for India on the trade front.
India is trying to attract huge investments in this field to provide manufacturing products needed by the world by solving the gaps in the supply chain due to the crisis in China. For the last three decades, the metals, construction materials and industrial products required for the world market, from computers and mobiles to toys and decorative electrical materials, have been arriving in the global market from China. But since 2019, due to the threat of COVID-19, the government has announced severe restrictions and the flow of products from China has been adversely affected.
Multinational companies in the United States and Europe are considering new possibilities to buy products with the growing concern that over-dependence on China will negatively affect the growth of the global financial sector. India is considering the possibility of growing as an alternative to China. Last month, the central government formulated a logistics policy that could improve the supply chain and bring more products to the global market at a faster rate and a lower cost. In the last two years, the central government announced a huge investment flow into the manufacturing sector through production-linked benefit schemes.