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Recently there has been a report that around 200 US companies are looking to shift manufacturing base from China to India after the general election as per the reports from USISPF (US-India Strategic and Partnership Forum). This latest move can be attributed to a host of external and internal factors in the India story. Some of the key ones are:
Chances of a FTA (Free Trade Agreement) between India and USA: As per the recent trade talks between India and USA, the USISPF has had discussions with the US Trade and commerce representatives to chalk out a detailed draft for the FTA and the first level of talks on this front could be held as early as within the next 12 months of forming the new government.
Regulatory issues: Issues ranging from land, customs, being part of a global supply chain etc. have all been enlisted so that the new companies can start operations at the earliest with least legal and regulatory hurdles.
Relaxation in FDI norms: A large problem relating to capital investment that the companies used to face has been almost eliminated in most sectors except for a few critical ones such as defence etc. This gives confidence to the new companies and helps them concentrate on key areas such as production setup, marketing and business development.
Hostile relations between USA and China: The ever increasing trade embargo between USA and China has forced companies on both shores to rethink expansion strategies as the economic and political scenarios do not seem to be encouraging to either of the players. This makes the companies to scout for more stable countries to setup plant and operations with less hostile environments.
Overall the news seems to have encouraged new entrepreneurs looking to setup manufacturing units in India in the MSME segment as there will be a big requirement from the American manufacturers for contract manufacturing companies, vendors to OEMs etc. At SolutionBuggy we see that almost 42% of the projects are for new plant setup, market research for new product market fit and diversification to new industries. To know more on how SolutionBuggy can help you hasten up your new plant setup login and post your requirement at https://www.solutionbuggy.com