Ditching China, These South Korean Companies Are Planning To Shift To India
As if the outbreak of COVID-19 was not enough for weakening China’s economy, many South Korean companies are now planning to move their units from China to India.
The Korean deputy consul general is staying in Chennai. Talking to the local media there, the ambassador said that he recently received calls from many companies that want to come to India. The main reason for these companies to shift their manufacturing base is the US-China trade war. In the pre-COVID-19 world, they survived the trade war, but in the post-COVID-19 world, things are going to be more difficult in China as it is the same country where the virus was found first, and the leaders of the Republic of China tried to hide the outbreak for a very long time.
How Soon Will The South Korean Companies Shift?
The deputy consul general of Korea, Mr Yup Lee, said that the companies want a ‘favourable’ nation. Talks from some companies are still in a preliminary stage, while others have reached an advanced stage of negotiation. “We have requests from two iron and steel companies, some startups and one from the hospitality sector which wants to come to India from China,” said Mr Lee.
The two steel companies that are on an advanced stage of negotiations are – Posco and Hyundai Steel. They have talked to the Indian government and are ready to move their manufacturing base here in Andhra Pradesh.
But there is one condition – the Indian government will have to make some initial investments in the manufacturing plants. The companies will shift as soon as the COVID-19 crisis ends. The two giants are ready, but other small companies will wait for the economy to restart.
Is Our Government Ready?
There are two things that the India government can do to lure these companies; restarting the economy and providing ‘favourable’ conditions. The Indian lobbyists have already started to roll out their dices to make the latter happen. Not just South Korea, our lobbyists are also aiming for Japanese companies as the Japanese government has offered 23.5 billion yen to companies seeking to move out of China.
HDFC Bank chairman Deepak Parekh said that the one thing government can ensure is – opening up country’s economy by making rules a little flexible. Primarily pointing out to the Japanese opportunity, Mr Parekh said, “We should make it easy for the Japanese to come to India rather than them going to Malaysia, Vietnam or Thailand. States have to take the initiative and offer them 2,000 to 5,000 acres in some special zone where they do not have to look for land or building approvals.”
All these plans are, though, supposed to be executed in a post-COVID-19 world and that world is distant enough not to be seen clearly right now.
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