India definitely has a tremendous opportunity here to attract companies to set-up manufacturing operations in our country. Companies will now look for potential alternative locations to China that offer the right infrastructure, lucrative corporate governance policies, beneficial economic and trade policies, provide trained manpower and workforce, to relocate their set-up.
It is going to impact their costs of operations and productions, delivery chains and mechanism, and also the quality of product. Which is why companies are going to be critically evaluative, extremely calculative and minutely discerning before making that decision. Many other competent countries like Vietnam, Thailand, Philippines, Malaysia, and Bangladesh are also competing to attract manufacturing investments in their countries.
India is definitely facing a tough competition. If India misses this opportunity then we have a lot to lose in terms of generating employment, reviving manufacturing industry, growing industrial output, augmenting our exports, elevating our GDP and making India an economic super power.
Having said that, India now has a very competitive and attractive corporate tax structure. At 15% corporate tax for the new manufacturing companies, India offers one of the lowest tax rates and hence is an attractive destination to make investments.
Need to provide right environment for business security
‘Ease of doing business’ and safeguarding the interests of the companies to conduct business in our country are two critical factors that will play a significant role in influencing the decision of companies in our favour or against us. We need to provide the right and just environment for business security.
Government will have to revisit some of the labour policies and law decisions to strike a just balance between protecting rights and privileges of both the parties – Manufacturing companies and labour. The government should also understand that companies are corporate citizens of the country and they too need protection to survive and contribute to the economic well-being of the country, all their stakeholders and the employees.
While India has no shortage of working hands, companies require rightly trained manpower that can contribute productively towards their growth objectives. Setting up skill development centres is key to that.
