India has a small window to attract cos moving out of China: BVR Subrahmanyam
India has a two-to-three year window to capitalise on the global strategy of de-risking from China and the government must come up with a set of policies and programs that make doing business and shifting to India not just attractive but easier also, NITI Aayog vice chairman BVR Subrahmanyam said.
“In the next 15 to 20 year time span, India has an opportunity in manufacturing. But the opportunity and the window for India is at best two to three years because supply chains are unwinding, becoming short term and looking for new geographies.
This is going to be a two or three year phenomenon, and then supply chains will freeze,” he said at the CII Global Economic Policy Forum 2023.
Citing the example of customs which doesn’t allow import of second hand goods, Subrahmanyam said when companies shift the factory they are moving second hand stuff. “So you need to allow that to happen as there are half-a-dozen other countries who are going to be competing with you to get the shift out of China,” he said.
According to Subrahmanyam, it is not just non-Chinese companies but even Chinese companies which are wanting to move out of China because of multiple shortages.
“They're having a shortage of demand because there is a population shift in terms of the age, a shortage of labor supply, the rising cost of labour and the stressed capital markets,” he said.
“So it’s not just multinationals who are trying to de-risk and move out of China. It is Chinese companies wanting to move out of China,” he said, wondering if India is shutting out from that move.
