Over 200 US companies planning to move their manufacturing base to India from China: USIS says

About 200 US firms are seeking to move their whole manufacturing base from China to India after the Lok Sabha elections 2019, a top US-based advocacy group confirmed the news.

The US-India Strategic and Partnership Forum’s (USISPF) President Mukesh Aghi added that the companies are in advanced talks to them about how to launch an alternative to China by investing in India

Aghi said that USISPF’s recommendation to the new government would be to speed up the reforms and bring transparency in the decision-making process.

“I think that’s critical. We would advise to bring more transparency in the process and to make it more consultative because in the last 12 to 18 months, we are seeing US companies look at some of the decisions being made, either e-commerce or data localisation, as more domestic-oriented than global,” he told PTI in an interview.

In his response to what the agenda of the new Indian government should be to attract investment, Aghi had hinted that New Delhi needs to accelerate reforms and to more clear in the process and engage more.

“We need to understand how we can attract those companies. And that means all the way from land issues to customs issues to being part of the global supply chain. Those are critical issues. There are a whole plethora of reforms that need to go further down, and I think that is also going to create a lot of jobs,” he said.

He said Mark Linscott (former Assistant US Trade Representative for South and Central Asian Affairs) is constantly working with USISPF member companies to come up with a recommendation as to what India needs to do to improve its exports.

“One recommendation, which I strongly believe is going to help India is that we should now start thinking of a Free Trade Agreement (FTA) between India and the U.S,” Aghi said.

“I think if India is concerned about cheap goods coming from China, an FTA will eliminate that need. You can put barriers to Chinese goods and still have the U.S. providing access to the Indian market and Indian companies having more access to the US market, and issues like GSP would diminish,” he said.

Aghi said that they have framed up a high-level manufacturing council within the member companies, chaired by John Kern, Senior Vice President of Supply Chain Operations at Cisco who are putting a document together detailing what India needs to do to convert it into a manufacturing hub.

“We plan to have the document ready by the time elections are over as part of recommendation, he said.