While India eagerly looks to court companies wishing to shift out of China, it may not actually be in the best interest of the country even if these companies make investments in India. “China is being blamed now for the coronavirus outbreak. Even people are saying that India stands to benefit as businesses will shift from China and come to India. But that may not be true,” Nobel laureate Abhijit Banerjee said speaking to a Bengali news channel ABP Ananda on Monday evening, PTI reported. Giving a hypothetical example, the MIT professor said that in the case that China depreciates its currency, Chinese products will become cheaper and preferable to buy.
“What happens if China depreciates its currency. In that case, Chinese products will be cheaper and people will continue to buy their products,” he said. Abhijit Banerjee is a member of Global Advisory Board formed by the West Bengal state government to tackle COVID-19 in the state. In the past few weeks, companies have shown interest in opening further manufacturing facilities in south east Asia and also in relocating their factories out of China due to coronavirus. Several Indian states have also started proposing terms and have made lucrative offers to woo these foreign companies to their respective states.
BJP-led Haryana has also participated in the race to attract foreign money. “Haryana has chalked out an aggressive strategy to woo the investments & companies intending to either shift from China or setting up of a new manufacturing facility in India,” Haryana CM Manohar Lal Khattar tweeted recently. Earlier, Yogi Adityanath-led UP had also proposed special packages to companies willing to move to Uttar Pradesh. China currently has a number of companies from the United States, Europe and Japan who are looking to shift plants or open additional units. India is also reportedly preparing a land pool nearly double the size of Luxembourg to woo investors, Bloomberg reported unidentified sources as saying. This land includes the already earmarked industrial area in states such as Gujarat, Maharashtra, and Andhra Pradesh.