No major impact of trade war on Indian firms in China, plan to boost investments this year, says survey

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New Delhi | Published: August 18, 2019 3:43:35 PM

Most Indian companies working in China do not see significant impact of the current trade friction involving China and the US and plan to ramp up their investments this year, according to a survey.

the number of IT and BPO companies that plan to make additional investments in China in 2019, has increased over the previous yearThe number of IT and BPO companies that plan to make additional investments in China in 2019, has increased over the previous year

Most Indian companies working in China do not see significant impact of the current trade friction involving China and the US and plan to ramp up their investments this year, according to a survey. According to the survey by industry body Confederation of Indian Industry (CII) and research and analytics company Evalueserve, 98 per cent of the respondents plan to make some investments in China in 2019, with two-fifths considering ramping up their investments over 2018. Moreover, the number of IT and BPO companies that plan to make additional investments in China in 2019, has increased over the previous year.

The survey titled ‘Business Climate for Indian Companies in China’ that drew responses from 57 Indian companies in China, noted that 74 per cent of the companies said trade friction involving China and the US has had no impact on their business.

“The survey of Indian companies working in China shows cautious optimism and confidence as compared to the previous survey last year. Most companies do not see significant impact of the current trade situation between the US and China on their business,” said CII Director General Chandrajit Banerjee. The survey pointed out that two thirds of the companies said that their business was “very profitable or profitable” in 2018, with higher earnings before interest and taxes (EBIT) than in 2017. Of the surveyed companies, 30 per cent generated revenues higher than CNY 100 million (approx Rs 101 crore) from China in 2018, and four of five respondents stated that their revenues in 2018 were higher than in the previous year, it added.

According to the survey, the largest proportion, 72 per cent, of Indian companies are invested in Shanghai, the most popular destination. Besides, 72 per cent of the respondents have up to 50 employees and hire more than half the workforce locally. As per the survey, while half the companies felt China’s innovation is more favourable than the worldwide average, rising labour cost, finding and retaining talent and stricter regulations were the top cited issues. Quality of products and services continues to be a key success factor in China, it added.

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