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Nirmala Sitharaman : Will create a blueprint to attract MNCs that are looking beyond China

The Union Finance Minister of India, Nirmala Sitharaman said in a statement on Saturday, 19th October 2019 that she will be preparing a blueprint for all the international companies that are planning to invest beyond China so as to make India an option as a preferred investment destination to set up their manufacturing base here. This announcement came after almost a month after the government lowered down the corporate tax rates.

Ms Sitharaman added that the industry leaders that are currently thinking about getting their businesses out of China are considering India to be an attractive investment destination. Henceforth, it may be important for our government to set up meetings with the major Industry leaders and also invite them to visit India, said Ms Sitharaman.

"I'd definitely be going back and design in some ways after which I will identify those multinational corporations, all American businesses or any other country European or a British origin who are now leaving China or who might be contemplating this decision. I will also be making a blueprint through which I will definitely approach them and present to them as to why India is a far more preferable destination for their investments," Ms Sitharaman said in a statement told to the group of Indian reporters at the conclusion of her interactions at the annual meeting of the International Monetary Fund and the World Bank in Washington, United States of America.

The Union Finance Minister of India, Nirmala Sitharaman said in a statement on Saturday, 19th October 2019 that she will be preparing a blueprint for all the international companies that are planning to invest beyond China so as to make India an option as a preferred investment destination to set up their manufacturing base here. This announcement came after almost a month after the government lowered down the corporate tax rates.

Ms Sitharaman added that the industry leaders that are currently thinking about getting their businesses out of China are considering India to be an attractive investment destination. Henceforth, it may be important for our government to set up meetings with the major Industry leaders and also invite them to visit India, said Ms Sitharaman.

"I'd definitely be going back and design in some ways after which I will identify those multinational corporations, all American businesses or any other country European or a British origin who are now leaving China or who might be contemplating this decision. I will also be making a blueprint through which I will definitely approach them and present to them as to why India is a far more preferable destination for their investments," Ms Sitharaman said in a statement told to the group of Indian reporters at the conclusion of her interactions at the annual meeting of the International Monetary Fund and the World Bank in Washington, United States of America.

The US President Donald Trump has been putting a lot of pressure on the American multinational corporations so as to shift their manufacturing bases from China to somewhere else. This is due to the ongoing US-China Trade war. Vietnam has been a major beneficiary of the ongoing tensions between the US and China Trade.

She also added that the investment could also be in many specific areas in which India has common capacity ecosystem building, either it's electronics, lithium-ion battery or any other semiconductors.

In the last month, to give a boost to domestic manufacturing in India as well as creation of new jobs, Finance Minister Sitharaman had announced a cut in the ineffective corporate tax without tax sops from 34.94% to 25.17% for the existing companies in India and for the new companies from 29.12% to 17.01%, starting from 1st October 2019.

However, this decision of the Indian government is not only based on the current ongoing trade war between the United States and China, as per Sitharaman.

"That could either worsen the situation or will maybe influence it at some level. But the point is that there are many companies that are looking to relocate for other reasons too," she added. "That is the reason why I had given that little fine line that I'm drawing about companies that are looking to locate somewhere out of China. As I've said that not every company would want to lock, stock and barrel move out of China, there are many such companies that will want to remain in China to serve the Chinese markets.

The Finance Minister also said that "China is seen as a very big domestic and also their purchasing power, consumption style may be very different from the people in India, but at the same time I'm making the assumption already that some companies may want to be there to serve the Chinese market whether their will be tension or no tension."


India wants to create such an ecosystem that will make it possible to invite various multinational companies to tap the Indian market.


"I'm going to allow that margin already. Well for those companies, even if they continue to stay in the Chinese market but if they still would want to produce or manufacture products from somewhere else either to export or to capture a new consumer hub, such as the domestic market of India," Sitharaman added.


"Although one thing is clear that the Indian market is still one of the biggest options to consider for the multinational corporations," she said in a statement. She also said that it is known that the opportunities are not so attractive in Vietnam, as are in India.


Sitharaman said, "In fact, today, as I was having a conversation with the bank and government representatives was that even Vietnam is getting saturated soon as they do not have the required manpower to address the programmes of investment."


"So, as we have  given concessional taxation approach to the corporate incomes, the corporate tax had been falling down and the problems I just mentioned about Vietnam's market, there is  a likely higher chance that those multinational companies that are currently moving out those investments from the Chinese market will definitely be looking at the Indian market," Sitharaman said.

During the meeting or the plenary session of the International Monetary and Financial Committee (IMFC) on Saturday, 19th October 2019, Finance Minister Sitharaman said that at the national level, a carefully assessed and a balanced approach to having a good mix of fiscal, monetary as well as the structural measures by countries can help achieve their growth potential. “IMF should provide the solutions that are specific to the important growth geographies so as to help relieve the current confusion or problem. IMF should also create a policy framework that would help to assess the vulnerability of various economies to capital flows and that development of a stronger surveillance system with sharper diagnostic tools can end or prevent the adverse effects on the fragile economies," the Indian Finance Minister said in a statement.

Also read:- Ola Cabs announces a big jump into self-drive car rental business in India

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