Looking to capitalize on growing trust deficit among countries for China where the Covid-19 global pandemic first broke out, Gujarat has written to political and business authorities of US and Japan, inviting them to shift their commercial units and operations from China to Gujarat. The state government has in the letters assured all required assistance and incentives to companies which decide to relocate their operations from China to Gujarat. US and Japanese companies already have a sizable presence in Gujarat and the recent visits of US President Donald Trump and Japanese PM Shinzo Abe to Gujarat have further strengthened the bond.
Confirming the development, principal secretary, industries, Manoj Das said the state government has written to the Japan government, Japan External Trade Organization (JETRO), US-India Business Council (USIBC) and US-India Strategic Partnership Forum (USISPF), inviting US and Japanese companies yet again in the changed geo-political situation. While the Japanese government has already announced a package for companies to shift their operations out of China, we have a dedicated Japanese park in Gujarat,” the official said.
“After the lockdown period ends, we will aggressively start a campaign to attract US and Japanese companies to Gujarat, especially those companies who are considering shifting their operations out of China,” said Das.
Mona Khandhar, minister, (economic & commerce), embassy of India, Tokyo said Japanese companies lead in manufacturing of high standards in a number of sectors. “In the global perspective, Japanese companies have highest number of foreign subsidiaries in China, followed by ASEAN countries. For attracting relocating Japanese companies, India will see tough competition with ASEAN peers.”
Commenting on Gujarat’s scope of attracting Japanese companies looking to relocate their Chinese units, Khandhar said, “At present, the service sector is the growth driver for Indian economy. Gujarat has a better manufacturing base, and being so, better prepared for attracting Japanese companies.”
Up to December 2013, FDI from Japan to Gujarat was close to £80 million. This FDI has risen to over £1.57 billion as of September 2019. Up to December 2013, FDI from USA to Gujarat was about £550 million. This has doubled to £1.07 billion as of September 2019.
As per a report by US India Strategic Partnership Forum dated April 2019, nearly 200 US based companies were willing to shift their operational base from China to India. This has been further compounded by the disruption of supply chain and business losses experienced by US companies due to COVID 19 outbreak in China.
