General Economy Ahead of GDP Figures
Local Calcutta Taxis seen outside the Howrah station in Kolkata | Sanjit Das | Bloomberg
Text Size:

New Delhi: India is planning to offer 324 companies including Tesla Inc. and GlaxoSmithKline Plc incentives to set up factories in the South Asian nation in a bid to capitalize from the trade war between China and the U.S., according to a document seen by Bloomberg.

The government proposes to provide the manufacturers land to set up a factory along with power, water and road access, according to draft of the document prepared by the Department for Promotion of Industry and Internal Trade and Invest India. Other companies that officials will reach out to include Eli Lilly & Co., South Korea’s Hanwha Chemical Corp., and Taiwan’s Hon Hai Precision Industry Co.

While the trade war has benefited countries such as Vietnam and Malaysia, rigid land acquisition rules and labor laws have prompted investors to largely ignore India when looking for alternatives to China. The latest proposal may reduce red tape, and set the nation, which expanded at the slowest pace in six years last quarter, on a path to double its gross domestic product to $5 trillion by 2025 — a goal set Prime Minister Narendra Modi.

Under the plan, the government will create a land bank for ready-to-move-in industrial clusters, offer investment and location-based incentives and rationalize anti-dumping duties. The proposal includes incentives for plug-in and hybrid vehicles, fuel efficiency and carbon taxation. For the electronics and telecom sector, flexible employment, manufacturing-related incentives linked to investments and value addition have been sought.

The country has made progress, rising 37 spots since 2017 in the World Bank’s ranking for ease of doing business, but it still comes in at 63rd, trailing not only China, but also Rwanda and Kosovo. At present, investors keen on setting up a factory need to acquire land on their own which, in some cases, involves a time consuming process of negotiating with small plot owners to part with their holding.

The Prime Minister’s Office is considering the proposal and a decision is expected soon. An email sent to the spokeswoman at the commerce and industry ministry wasn’t immediately answered.

Asia’s third-largest economy expanded 5% in the June quarter, with slew of data pointing to weaker economic activity.

Getting investment inflows and boosting exports is therefore high on economic agenda of the government. It has already slashed corporate tax rate, making it competitive with rest of Asia, and has relaxed foreign investment rules to attract fund inflows in the country. -Bloomberg


Also read: India is clearly heading for GDP growth below 5%


 

Subscribe to our channels on YouTube & Telegram

News media is in a crisis & only you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And we aren’t even three yet.

At ThePrint, we invest in quality journalists. We pay them fairly and on time even in this difficult period. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. Our stellar coronavirus coverage is a good example. You can check some of it here.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. Because the advertising market is broken too.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous, and questioning journalism, please click on the link below. Your support will define our journalism, and ThePrint’s future. It will take just a few seconds of your time.

Support Our Journalism

5 Comments Share Your Views

5 COMMENTS

  1. Why not utilise the land remaining unutilised by large and medium sick shut down manufacturing units ? Any way those lands were at lease quite often . Some from the baggage of license raj when units were setup in so-called industrially backward areas . They soon shut immediately after the due sops of tax , duties and tariffs ended.
    Some include very large enviable land held by very known brands closed since ages and workers laid off. As time progressed they are being held on as prime realestate with obvious intentions .
    Industry is welcome with complete infrastructure and single,window single day clearance in true sense if we are to continue growth and become a 5 trillion economy . However careful thought and planning with contingency incase they shut down or relocate in future ,( as I was informed some occupied but yet to start production) due to any market or technology driven reason.
    As agriculture land is fast depleting due to fragmentation of families from rising population , declaring Agriculture as Industry might be helpful long cherished. Vandemataram

  2. Vodafone ko toh rakh nai pareho, Tesla aur Glaxo ko bulaoge accha hai ji inka.
    Aur hum log pakode tale kya, tum aao chai banane me madat karo

  3. The news that Modi Govt plans big incentives to attract foreign manufacturers from Tesla to Glaxo, has appeared on 20 November , 2019. Further , the Govt is also reported to be planning to offer 324 companies including Tesla and Glaxo incentives to set up factories in South Asian nations in a bid to capitalize from the ongoing trade war between China and the US. These can be viewed as very big or mega ambitious endeavors to generate economic activities of a bigger size while creating employment opportunities in the country. These big endeavors are not the only ones. During last week of October and in November 2019 , more like plans of the Govt have appeared in the news media. In this context , it may be apt to refer readers to this Vedic astrology writer’s predictive alerts for India in article – “ Predictions for coming year 2020” – published at theindiapost.com on 10 October , 2019. Briefly speaking , one of the prediction is that the Govt is likely to make “elephantine endeavors” in first three months of 2020 to boost up the economy sector. This appears to be meaningful and accurate as well.

  4. In Indi, a Pakoda wala can make only so many pakodas per day. Labor with poor productivity is equivalent to no labor. Just imagine, only country in the world with 92 holidays per year. Well, may be France too.

LEAVE A REPLY

Please enter your comment!
Please enter your name here