MIGRATION OF FOREIGN COMPANIES TO INDIA

The Government of India has launched various schemes in the last few years initiatives/schemes for promoting growth and attracting investment in India. The Make in India programme was launched on 25th September, 2014 with aim of facilitating enhanced investment, foster innovation, build best in class infrastructure, and make India a hub for manufacturing, design, and innovation. Continuous efforts are made under Investment Facilitation and Outreach for implementation of Make in India action plans to identify potential investors, support Indian Missions abroad and State Governments for organizing events, summits, road-shows and other promotional activities to attract investments in the country.

Measures have been taken to improve the country’s investment climate, as a result of which India jumped to 63rd place in World Bank’s Ease of Doing Business [EODB] ranking as per World Bank’s Doing Business Report (DBR) 2020 from a rank of 142 in 2014. Department for Promotion of Industry and Internal Trade (DPIIT), in consultation with the State Governments, has also started a comprehensive reform exercise in States and UTs under Business Reforms Action Plan (BRAP). All States/UTs in the country are ranked on the basis of reforms implemented by them on designated parameters. This exercise has helped in improving business environment across States.

An Empowered Group of Secretaries has been constituted to fast track investments in the country. Similarly Project Development Cells (PDCs) have been set up across Central Government Ministries / Departments to handhold investors and spur sectoral and economic growth. Further, a GIS-enabled India Industrial Land Bank has been launched to help investors identify their preferred location for investment. National Single Window System (NSWS) has also been soft launched in September, 2021 to facilitate clearances for investors.

Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s manufacturing capabilities and exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in Union Budget 2021-22 for Production Linked Incentives (PLI) schemes for 14 key sectors of manufacturing starting from fiscal year (FY) 2021-22. With the announcement of PLI Schemes, significant creation of production, employment, and economic growth is expected over the next 5 years and more.

Measures taken by the Government including on FDI Policy reforms have resulted in increased FDI inflows in the country year after year. India registered its highest ever annual FDI inflow of US$ 81.97 billion (provisional figures) in the financial year 2020-21 despite the COVID related disruptions. These trends in India’s FDI are an endorsement of its status as a preferred investment destination amongst global investors. In the last seven financial years (2014-21), India has received FDI inflow worth US$ 440.27 billion which is nearly 58 percent of the FDI reported in the last 21 years (US$ 763.83 billion). This indicates increasing inclination of global companies to set up their business in India.

Government has taken various other steps in addition to ongoing schemes to boost domestic and foreign investments in India. These include measures to reduce compliance burden for industry, opportunities under National Infrastructure Pipeline, Reduction in Corporate Tax, Easing liquidity problems of NBFCs and Banks, Policy measures to boost domestic manufacturing through Public Procurement Orders, Phased Manufacturing Programme (PMP), etc.

Besides the above, activities are also undertaken through schemes/ programmes, by several Central Government Ministries / Departments and various State Governments from time to time. The details of these measures are not centrally maintained by Department for Promotion of Industry and Internal Trade.

It may be noted that taking into account the above measures, five countries have done the best to set up their companies in India, of late, says a study.

First here is the United States. India and America have had strong business relations over the many years and several American companies are fulfilling the indispensable needs of the Indian market. From searching online through Google to drinking Coca Cola, or using the latest I-phones by Apple, the Indian consumer is, by and large, a dedicated follower of American companies. American companies are preparing to set up an alternative to China by investing in India. Some renowned American companies are Amazon, Citibank, Coca-Cola, Ford India, Google, American Express, Pepsico, Hewlett Packard, IBM, JP Morgan Chase, Adobe Systems Incorporated, Apple Inc., Microsoft Corporation, Cognizant, Oracle.

Second is Japan. Holding the baton in automobiles and electronics sector, Japanese companies were amongst the 1st ones to enter India. An incredible 1,305 Japanese companies are registered in India. Japan and India share strong ties, as India seeks Japanese expertise in sectors such as infrastructure, energy and manufacturing. India-Japan Cooperation Act East Forum, established in 2017 has been a driving force to advance India-Japan cooperation. Japanese companies have a huge opportunity in India and since years Japan is dominating the Indian market through brands like Suzuki, Honda, Sony and Panasonic etc. A few big Japanese companies are Hitachi, Mitsubishi, Toshiba, Canon, Toyota, Yamaha, Panasonic, Honda, Sony, Suzuki.

Third happens to be the United Aran Emirates(UAE). India has strong bilateral ties in the middle east, especially with the United Arab Emirates. Abu Dhabi Investment Authority (ADIA) announced its decision to invest US$ 1 bn in the National Investment & Infrastructure Fund, India’s attempt to raise equity funds for the infrastructure sector. The United Arab Emirates (UAE) intends to use India as a food security base and plans to invest in its agriculture sector. More specifically, the UAE plans to increase its imports of Indian food grains and horticulture products. UAE has already launched talks with various state governments for this purpose. Some key companies functioning in India include Emaar, DP World, Abu Dhabi’s National Petroleum Construction Company, Abu Dhabi National Energy Company, Drake and Scull International.

Germany happens to the fourth. Indo-German trade story dates back to the 16th century when the German companies started manufacturing in India. Some notable names are Krupp AG & Demag, who set-up the Rourkela Steel plant, while, Bosch set-up its 1st unit to make spark plugs in 1953, followed by Siemens, Bayer, Daimler-Benz, etc. India has more than 1,600 German companies and over 600 Indo-German joint ventures in operation which include big names like, BMW, Volkswagen, SAP, Siemens AG, and Merck. Government of India is seeking investments from German companies in areas including smart cities and construction of airports to increase economic cooperation between themselves.

France occupies the fifth place. India and France are now doing their best to promote the following:

(1) Increase trade in goods to US$ 16.7 bn by 2022.

(2) To encourage SMEs and mid-cap companies.

(3) To play a growing role in the economic and commercial exchanges between the two countries.

(4) Promote Make-in-India initiative for Indian and French defence enterprises to enter into arrangements for co-development and co-production of defence equipment in India. Scorpene submarine; Defence Research and Development Organisation (DRDO) and SAFRAN discussions; Rafale are some prospects being aggressively considered.

Besides, the two countries have witnessed exemplary cooperation programme in the Smart Cities of Chandigarh, Nagpur, and Puducherry. The signing of the loan agreement between the Agence Francaise de Development (AFD) and the Government of India for US$ 112 mn in support of the Smart Cities Mission is another achievement.

France has committed US$ 785 mn to the International Solar Alliance (ISA), a treaty-based organization, launched by Indian Prime Minister in 2015, aims to promote solar energy in 121 countries.