Prime Minister Narendra Modi signalled a major push to boost investments in the country and capture a part of the supply chain that is expected to move out of China as global corporations look to diversify their production base in the aftermath of Covid-19. Modi discussed strategies to attract investments with his top ministerial colleagues, paving the way for a comprehensive strategy paper to be formally cleared by the cabinet in the coming weeks.
The meeting comes days after the PM spoke about the need to make India self-dependent following supply lines for crucial drugs, electronic goods and chemicals getting affected in February when
production around Wuhan, the source of the novel coronavirus, was disrupted. Although the government had been working on a "China plus One" strategy for the past few months, it gained momentum with leading industrial countries encouraging their companies to look at manufacturing facilities outside the Asian giant.
The US has already put its plan public with the secretary of state Mike Pompeo, stating that the Trump administration was trying to "mesh the supply chains that both countries (India and the US) have access to", especially in areas crucial for national security. India is seeking to tap the rush when a sharp increase in wages in China had already prompted many MNCs to look at alternative bases.
India's potential has exponentially grown with the global rethink about China being the dominant source of supply in the wake of outrage over its links to the virus. The department for the promotion of industry and internal trade is putting in place a GIS-based platform, which currently covers around a dozen states, allowing investors to decide their location. In the Budget for 2020-2021, the government had also announced an investment clearance cell, which is a step in this direction.
