Lucknow, May 7 (PTI) India needs to strengthen its manufacturing base as well as undertake more reforms to attract investments from companies globally, according to NRI businessman and chief of FI Investment Group Frank Islam.
“If US companies decide to leave China, the most important factor that will determine the location where they will relocate to will be the business climate. Businesses make decisions based on profit and loss. While India is sure to get some investment, there will be a number of other countries that will also be vying for the US business,” Islam told PTI on Thursday.
In the wake of the coronavirus pandemic, there are reports that some global companies might shift their manufacturing activities from China. Chinese city of Wuhan was the epicentre of coronavirus infections before it spread to other parts of the world.
Noting that no single country would be able to produce enough to replace the Chinese output, Islam said, “if there is a complete pullout of US companies from China, India will get a significant share of the manufacturing business”.
China accounts for a significant share of global manufacturing activities.
“The most important thing India has to do is to strengthen its manufacturing base. There are a number of things the country can do to attract US and global companies. It should start with reforming the economy, which will attract the much-needed foreign investments to improve its infrastructure including roads, railroads and ports , Islam said.
The Chairman and CEO of FI Investment Group also said there is definitely an anti-China bias at present in the US due to the coronavirus pandemic and China’s failure to assume responsibility for it.
“But I can’t imagine American companies leaving China because of the economic costs of doing so. They have substantial investments in their Chinese operations,” Islam, who is from Azamgarh district in Uttar Pradesh, said.
Lockdowns due to the COVID-19 have resulted in supply chain disruption and the US would want to guard against any similar disruptions in future, the NRI entrepreneur said.
About the ongoing tensions between US and China, he said, “here we are talking about the world’s two largest economies accounting for nearly 41 per cent of the global economy. Any major spat between the two will have serious implications for the global economy .