In the rally, it was the foreign investors, who took the front line attempts to shift their manufacturing operations and expansion programme from China to other Asian countries and India, after the Chinese currency, renminbi, appreciated, causing the labour cost to soar and the Chinese GDP growth to nosedive. on the heel, the Japanese adopted the investment plan with China+1 strategy. Following suit, Indian companies, who were sourcing from China, diverted their focus by setting up their own plants in the country. Now, it is the time for Chinese conglomerates, who are in their corporate board, to shift to India, which is reckoned a better investment destination than China.

The Apple CEO Tim Cook plans to expand the behemoth’s operations in India. This would lead the exodus of Apple production chain, such as Foxcon, setting up manufacturing facilities in India and causing loss of ten of thousand jobs in China. Foxcon has decided to invest US $ 5 billion in India. Foxcon, a Taiwanese company, is the world’s largest contract manufacturing company in electronic industry.

General Motors, with its Chinese partner SAIl (Shanghai Automobile Industry Corporation)decided to invest US $ 1 billion in India as a part of its expansion programme of cars and SUVs, instead of in China.

Huawei’s investment is not new for Chinese companies to make debut in Indian smart phone manufacturing. A number of Chinese vendors are in the rally to set up their smart phone manufacturing plants in India. Vivo China has already set up a smart phone manufacturing unit in Greater Noida. Xiaomi, ZTE, One Plus, Gionee are in the queue to open theirs.

Chinese renewable energy firm Chint Group, chemical firm Sopo Group, Shanghai Electric Company and Ding Sen are among the firms looking for substantial investment in India. Chinese biggest industrial park developer CFLD looks to set up 10 industrial parks in India.

Indian firms took U-turn in sourcing from China. Instead of importing from China, Indian firms established their own manufacturing operations in India. Havells, Godrej, Micromax -a handset manufacturer, Bosch - auto part maker, have all started exploring manufacturing operations to India.

Shifting from China and looking for alternative destinations for cost effective manufacturing has become boon to India. India provides big pool of working population, low wages and high economic growth. Labour cost in India is one-third of China. In 2014, average manufacturing labour cost was $0.92 per hour in India, compared to US $ 3.5 per hour in China, according to a World Bank survey.

Further, unlike China, India’s high economic growth is sustainable because of its strong domestic demand. Nearly 65 percent of the GDP is engineered by domestic demand.

With China shifting to the model of domestic demand oriented growth, manufacturing production wobbled in China. Growth of manufacturing production plunged to 6.8 percent in August 2016 from 11.3 percent in October 2013, according to Chinese National Bureau of Statistics. Number of private enterprises was reduced to 214,000 in 2014 from 274,000 in 2010. These sent China into the red zone of job opportunities. China is going to lay off 5-6 million workers in the next two to three years in the wake of overcapacity in the country. According to the Chinese minister for human resources and social security, China would lay off 1.8 million workers in coal and steel sectors.

The downturn in Chinese manufacturing unleashed opportunities to India’s Make in India to rev up its manufacturing strength. Manufacturing become the key factor for high GDP growth in India. In sector wise GDP growth for 2015-16,manufacturing witnessed the highest growth of 9.3 percent, making a big leap from 5.5 percent growth in 2014-15. Even though misgivings shrouded over the statistical figure of growth, when it is compared with index of industrial production, which crawled to 2.4 percent growth, the Chinese and foreign investors brushed aside the fuss.

The foreign investors were undeterred. This resulted in gushing flow of foreign investment in India. Foreign investment spurred by67percent over the two years period of Modi government. Of these, investment in manufacturing was highest with 65 percent share.

Besides the decay in Chinese growth, foreign investor’s penchant towards India was triggered by speeding of reforms and ease of doing business. According to World Bank’s Doing Business Report, India’s rank notched up to 130 rank in 2016 from 149 in 2014. In the reforms, focuses were made on liberalization in foreign investment policy, simplification of procedures and use of Information technology to accelerate the ease of doing business. A total of 20 Central Government services were integrated with eBiz portal. FDI in defence production was largely liberalized and defence is now reckoned the main pillar of Make in India.

India’s handset industry made a landmark shift from user industry to producing industry under the Make in India drive. Until two years ago, a few were manufacturing handsets in India, after Nokia closed down its factory in Sriperumbudur in Tamil Nadu. Today, there is a surge in domestic production. It meets 45 percent of the handset demand in the country. According to Telecom Minister Ravi Shankar, India produced 100 million mobile phones in 2015, against 64 million mobile phones in 2014- triggering a growth by eighty percent within a year.

Thus, there are several favourable counts which can make India a better bet for investment. Even though Make in India drive has been slowed down owing to the requirement of reforms in regulations through parliamentary democracy, a momentum has been created to make the country a hub for global workshop. (IPA Service)