It is said that every crisis also brings opportunities. As entire world is putting behemoth efforts to contain the pandemic of COVID 19, it certainly has paved the ways to revalidate the economics of investment, trade across the boundaries of Nations.
China, the country where Corona Virus was 1st reported, has attracted lot of ire, scrutiny & suspicion. Manufacturing Giant nation is forced to take cognizance of ever increasing negative sentiments against the very word “Chinese” for the 1st time in so many decades. The powerful nations like US, EU, Koreans, Japan have started encircling the Chinese. World economies, which so far had reliance on China for their supply chain are aggressively reviewing steps to derisk supply chain bottlenecks created in pandemic & considering other nations to set up bases.
There is strong pushback against China by many countries including Japan, US, UK, Korea. While this geo-political situation is evolving rapidly, one thing which can possibly be India’s gain, is the opportunity to present itself as Immediate alternate, powerful & sustainable option in ASIA.
Almost all these countries are favorable to India & if approached thru right policies & with agility, could turn out to be India’s big gain. These countries will be more than willing to consider India to de risk investments & debottleneck supply chain issues.
Understanding the strategic & economical importance of this, Government of India & Front running states like Maharashtra must make speedy moves through policy framework redefinition, dialogue, engagement & persuasion.
About 200 American companies are seeking to move their manufacturing base from China to India post the general elections, a top US-based advocacy group has said, observing that there is a fantastic opportunity with firms looking at alternatives to the Communist giant.
Opportunity for Maharashtra & AURIC
Maharashtra, has aimed at becoming trillion dollar economy by 2025, Maharashtra & this will be incomplete without role & contribution Aurangabad’s industrial areas. AURIC which is poised to become fully operational by next few years certainly is at pole position to contribute to this goal. AURIC must take lead to attract some of the big investments eying to move out of China.
AURIC being India’s 1st greenfield industrial smart city, it naturally presents its huge advantage as compared to other states, cities. Already it has attracted big investment proposals from multinationals from US, UK, Korea, Russia & other countries.
Koreans are keen to move investments to India. Giant corporates like POSCO, Hyundai, Samsung are major investors who are actively looking to move out of China & can favor AURIC as next destination provided right steps are taken.
Chennai: Rising trade war between US & China has pushed South Korean companies to consider moving some of their factories from China to India.The Korean consulate in Chennai has been working with a number of requests, some in preliminary stages, while others advanced stages.
POSCO is one of the world’s biggest Steel maker, Hyundai is diversified group with interests in steel processing, automotive industry. Samsung, apart from being an electronic giant has diversified product portfolio ranging from Retail, apparel, Chemical, EV products, medical equipment’s & consumer electronics.
AURIC if we see, has the potential, necessary ecosystem, suppliers for each of these industries. GoM, MIDC & AITL should actively organize online approach through formal channels to initiate engagement. Korean companies like Hyosung which has already invested in AURIC can also take lead in this join initiative.
Tech giant also can be focus area. Giants like Microsoft, Google, Apple are willing to shift out of China. Recently Wistron Corp., one of Apple’s manufacturing partners in China, said this week half its capacity could reside outside China within a year & are actively looking at India for manufacturing base. Further around 200 US companies are also willing to shift to India post US General elections & recently this claim is substantiated by US-India Strategic and Partnership Forum’s (USISPF) President Mukesh Aghi. As per the same the companies are talking to them about how to set up an alternative to China by investing in India. Leveraging AURIC’s current stature in electronic, electronic goods well supported by earlier policy laid for Electronic manufacturing industry. This should also put IT/ITES players on the map as Aurangabad has good chances to become next Gen IT investment destination.
Japan, on similar lines has actively initiated steps to withdraw operations of Japanese companies from China. Japanese companies which have export oriented operations are largely to look at as data suggests these companies are actively looking to shift EoU (Export oriented units) to be shifted to other Asian countries. Some of these names are SONY, RICOH, Asics Corp which are actively looking to shift operations out of China. Japan Government in order to diversify investments has announced package to enable firms in shifting.
The Gujarat government is eyeing to increase its foreign direct investment (FDI) from Japan owing to a perceptible trust deficit between the country and China post COVID-19 outbreak. The FDI in Gujarat from Japan till September, 2019 stands at Rs 15,700 crore. Manoj Das, principal secretary-industries, stated on Thursday that Gujarat is preparing to attract further Japanese investment.
Here DMIC can actively engage with Japan. DMIC, touted as India’s most ambitious investment corridor project is supported by Japan. AURIC is 1st industrial smart city which is part of DMIC. Taking this thread forward, a kind of aggression & agility is required to initiate active engagement with Japanese corporates. Recently Gujrat state has already initiated preparations for active campaign to attract Japanese investments & Dholera may emerge as potential destination. Therefore proactive, aggressive steps are very much required from Maharashtra Govt.
AITL with help of Guardian Minister Hon. Subhas Desai who is also state’s minister for industries & investments , must initiate a campaign during the lockdown situation.
While these are external opportunities seen, there is internal attitudinal, strategic shift required to be made by Government of Maharashtra.
Growth imbalance has been a trait of Maharashtra & Historically Mumbai Pune zone has attracted every 3/5 investment proposal & has been center for economic activity in state.
What we are seeing today is Mumbai-Pune region has become the largest sufferer of Corona outbreak & this has resulted into revenue losses worth billions to State Government. Increasing Corona cases posed huge social, health & economical risks in this region.
If one looks at positive side of it, then certainly this pandemic situation has given state policy makers, time & a genuine reason, for actively considering de-centralization of investments at one place.
AURIC presents excellent alternate option for decentralization & should be able to develop into a sustainable investment & growth center to attract new investments.
While this looks catchy enough, there is desperate need for local pressure groups, informed netizens also to take up this for the long term benefit of our city. Picture is gradually becoming clear that India will stand to gain in long term, it must be backed by agile ,active & joint efforts from states like Maharashtra if trillion dollar economy dream is to be kept alive.
Government of Maharashtra, MIDC, AITL & DMIC should start putting immediately joint steps in this direction. After all, the state who take proactive steps now, will emerge as winner later.
By Nitin Deole