Global Economy

India needs to improve contract enforcement, upgrade infra to attract companies, say experts


NEW DELHI:
India
needs
to
improve
contract
enforcement mechanism and
upgrade infrastructure
to attract companies looking
to move away from China and seeking other investment destinations, feel experts.

The outbreak of COVID-19 has created unique opportunities for
India, and the country should do its best
to attract companies and investments as it would help in generating jobs, creating wealth and promoting ‘Make in
India‘, they said.

“With the global reliance on Chinese manufacturing bases exposed in light of the global pandemic, many countries are now looking at alternate manufacturing sites
to increase their supply chains.

“Given
India‘s minimal labour costs, slowly reducing corporate taxes and relaxed bureaucratic red tape,
India can poise itself
to become the next manufacturing hub,” said Atul Pandey, Partner, Khaitan & Co.

However, in order
to roll out the red carpet
to global firms and present a credible alternative
to China as a manufacturing hub, the Indian government will have
to overhaul the state power utilities, put in place a mechanism for enforcing commercial contracts by bringing in specialised commercial courts and establish a consultative mechanism for commercial/foreign exchange related laws, he said.

The government, Pandey added, could also look at other issues like reducing stamp duties and other related costs.

“COVID-19 has brought a unique opportunity for
India. The disruption due
to restriction of import has given an opportunity
to local manufacturing units
to fulfill the domestic need which earlier was catered with imported supply,” said Daizy Chawla, Managing Partner, Singh & Associates.

“Further, it has also opened a wide opportunity
to attract more and more foreign companies, especially those who want
to wind up their businesses in China,” she added.

The entities that are closing operations in China and are wanting
to shift
to
India will find it easier
to start business, thanks
to the initiative taken by the Modi government
to
improve ease of doing business, Chawla said.


India has the opportunity
to emerge as the next global production hub as it can offer a large internal market, quality labour at competitive rates and a thriving private sector.
India could further
improve its competitiveness by focussing on harmonizing trade and FDI policy,” said Mohammad Athar, Partner -Economic Development and Infrastructure, PwC
India.

The private sector, he added, can play a vital role in helping the government create an enabling ecosystem
to attract investments from abroad.

L Badri Narayanan, Partner, Lakshmikumaran & Sridharan Attorneys opined that
India‘s improved tax regime and reduced rates will be helpful in attracting overseas investments.

“In the recent past, the tax regime in
India has been quite dynamic and the government has introduced a range of tax sops in order
to attract investment, especially in the manufacturing sector,” he added.





READ SOURCE

Leave a Reply