[Dinesh_Malhotra]

Originally Posted by Torq

Gone are the days when we would have said, ye India hai, yaha kuch nahi ho sakta!
Guys, what's with the pessimism and criticism?

I am yet to understand how and when between 2014-2020 we all got termed as pessimists or critics if we ever show the mirror to our countrymen or our elected (to perform) government. I for one, ain't a left or a right guy. I am a normal person, a businessperson who has had to face a lot of trouble thanks to GOI, leading to even premature shutting down of two of my businesses.

I ain't blaming myself for their mistakes even if the loss was mine.

But, I still hope for them to recover from their follies so that we can recover with them too.

[DigitalOne]

Uttar Pradesh, Madhya Pradesh, Gujarat ease labour laws to boost investment, jobs

Link

[V.Narayan]

Just the views of one retired, put out to pasture, SME business wallah.

Some diversification of future additional production by (mainly) American companies out of China into Vietnam, Malaysia, India etc will happen. It will be driven by the need of those American companies to diversify their procurement to geo-politically safer shores. Willy-nilly some of that will come to India. How much is anyone's guess. Few if any US company will visibly shut down a plant in China and risk the ire of the Chinese Govt. China is a large market too for each of the companies that produce and export from there. The diversification out of China will be easier for those USA companies that do not own and run the plants in China but simply outsource and control the quality of the output.

In all fairness I will wait to hear what industrial, labour and land reforms GoI comes out with in the next 60 to 180 days and then decide if US companies will beat a hasty path to our shores or not. This Govt has shown a willingness to bite the bullet on needed reforms {GST} & admin straightening out {Roads, Power supply, Coal, Railways} even if sometimes it is done with inadequate preparation {GST} and sometimes done with zero application of mind {DeMo}.

Our political class across the board {except the Communist parties} have accepted that reforms is the way forward. Our bureaucrats at the middle levels, especially those who are older, have not always bought into this as reforms eat into their power base of deny, stop, ban, cancel, ration, penalize etc. At the senior levels in parts the willingness to embrace reforms is there, no doubt about that. At the junior levels lubrication M still is often the only route though even there digitization is eating into that pie :-)

Having built, bought and sold more than one business in India this is my assessment. I am happier with a gradual step by step reform process than a "big bang sweep away the old" as our country is too large and way way too complex. Every reform helps 5 sectors/regions/trades and hinders 2 others, has unintended consequences on 1 more and fails to impact another 2. The complexities are too high to be foreseen by anyone, not even T-BHP members :-)

The one reform that will make the single most profound and most lasting impact will be reform of the judicial system.

[Sutripta]

Originally Posted by V.Narayan

The one reform that will make the single most profound and most lasting impact will be reform of the judicial system.

Hope systemic bias does not creep via said reform.

[Jeroen]

I am not so sure whether companies are actually going to replace/move their activities from China to India a hundred percent. What companies are learning is that it makes sense to spread your assets. If your business becomes to reliant on one particular country, be it for your sales and or production and or supply, that in itself is a potential exposure/liability.

We have always had a strategy to spread our global delivery centers and R&D centers across multiple regions around the world. It is a great asset as part of our Business Continuity Planning.

So I think it is more likely that business rethink their strategy what kind of assets and activities and dependencies they have on countries/regions and where possible relocate/move some of it rather than all. Of course, not possible for all businesses, but at least everybody is likely to be at least thinking about these things.

You just don't want to have to many eggs in the same basket so to speak. Whether that basket is China, India or another country.
Jeroen

[Sutripta]

A point of view
https://www.business-standard.com/ar...1100004_1.html

Read along with
https://www.livemint.com/news/india/...782022044.html

There are of course opposite points of view. Pick any which suits one worldview.

Sutripta

[Zed]

In the light of the Covid19 situation, relocating supply-chain, manufacturing or R&D from China to another "best cost" location is not the solution multi-national corporations are seeking. On the contrary there will be renewed discourses in political and industrial circles on the risk Vs reward of globalization, which plays well to the tunes of protectionism + nationalism echoing across the globe.

On the China Vs India debate, a key differentiator is the consumption capacity of the local market. This is where China leaves India trailing and has been a driving force in attracting investments in China for the past two decades. Covid19 is leading a drop in consumption across countries so that's a neutral impact. Looking at the recent numbers from the auto-sector China may actually lead the recovery which works against the whole "let's move out of China" discussion.

The current anti-china political theater, stemming from the office of the leader of the free world and a handful of other global leaders, does have a ripple effect on industry and trade. But will this result in a long-lasting and significant impact to the present world order? I don't believe it will.

Originally Posted by ValarMorghulis

Yes, China has better facilities owing to their governance form where they can bulldoze entire villages to provide facilities to companies

I do not believe that marginalized communities paying the price for industrial progress is a phenomenon unique to China. Do you?

Originally Posted by Thermodynamics

We have a stable Government for two consecutive terms, we have record low oil prices. However besides these advantages, our GDP performance has been abysmal, therefore, I will keep my fingers crossed about how they are going to handle it this time.

This is exactly the kind of question investors looking toward India will ask. And it is a valid question.

Originally Posted by V.Narayan

Our bureaucrats at the middle levels, especially those who are older, have not always bought into this as reforms eat into their power base of deny, stop, ban, cancel, ration, penalize etc. At the senior levels in parts the willingness to embrace reforms is there, no doubt about that. At the junior levels lubrication M still is often the only route though even there digitization is eating into that pie :-)

Sums up the India governance story: 1947-2020.

[Lobogris]

Here is just one example that might put things in perspective:
Chinese auto sales have gown, yes grown over 4% in April! While we are still far from even resuming most activities, their economy is on the road to recovery. The sales for April alone were over 2 million units, something that we sell in almost an entire year. Our sales in April were actually zero. You can see the difference clearly.

https://www.wsj.com/articles/china-c...il-11589180927

[mxx]

Unfortunately India is likely to miss this bus too, like it has missed several others before. We weren't even trying. Forget trying to invite investments in the past few years the license raj and protectionism has been getting stronger. Tax men has been out handing out notices based on vague policy wordings. Frequent changes in policy and regulations -often biased against foreign companies- makes it difficult for firms already operating here.
Just last year Amazon and Flipkart-Walmart was hit by sudden policy changes putting them at a disadvantage. Now was this because of CIAT or because another big Indian conglomerate is set to launch their ecommerce platform is anyone guess. Everyone is watching this.
Why would anyone come here?

[v1p3r]

All this talk of being pessimistic and looking to lure businesses is likely to come from people who have never had to set up a business in India. If you compare the ease of setting up a business in India vs China vs a western country (as I have), the truth should become self evident.

Our bureaucracy and unfathomable and abysmal governmental sloth when it comes to progress are the reason our two largest companies together don't have the market cap of ICBC. It is the reason Chinese internet companies invest in India, not the other way round. It is the reason that China is the world's largest car market, not India. Before you ask, India and China had roughly the same PPP per capita income in 1980.

It's not like Indians don't work hard. In the US and UK, they are by far the richest immigrant communities, and a hugely disproportionate number of CEOs and founders and billionaires are Indian. Heck, 3 of the top 10 CEOs in the world according to HBR are not only Indian, they're from the same damn school! Clearly we have the raw talent. Clearly we have the education system (though that is another story). What's missing is an environment to foster any form of entrepreneurship, business making, or industry.

[V.Narayan]

I don't wish to be a pessimist but this is 'Make in India' version 2.0. As someone who participated in the 'Make in India' version 1.0 I had a ring side view of what was said vs what got done vs what PR it was conjured into vs reality of getting your payments out of GoI. Here in Version 2.0 fortunately selling to GoI might not play any significant part.

The reason MNCs hesitate to make our country a base for their global production requirements is not just infrastructure. The bigger reasons are - retrospective rule changes at a whim; mercurial tax rulings that often cross the line of state intimidation; customs & port chokes. The last named is the biggest impediment to just in time export oriented supply chains. Unless our bureaucracy understands that their attitudes & desire for authority to deny changes no amount of policy and Govt announcements will make a difference. The State Govt's by and large are more pro active, co-operative than the Central Govt. Most of the problem areas - Customs, Ports, Income Tax, GST, Environment are all areas controlled by the Central Govt - both the major parties are equally bad when at the Centre. After the initial impetus from the Centre in 1991 the reforms in India are emerging in a meaningful form mainly from State Govt's.

[Sutripta]

Originally Posted by V.Narayan

I don't wish to be a pessimist but this is 'Make in India' version 2.0. As someone who participated in the 'Make in India' version 1.0 I had a ring side view of what was said vs what got done vs what PR it was conjured into vs reality of getting your payments out of GoI. Here in Version 2.0 fortunately selling to GoI might not play any significant part.

And how does 'ease of doing business', in which we have steadily improving scores, tie in with the above view?

Sutripta

[V.Narayan]

Originally Posted by Sutripta

And how does 'ease of doing business', in which we have steadily improving scores, tie in with the above view?

Ease of doing business runs on parallel tracks for large, medium and small enterprises. If we take life for large enterprises ease of doing business in India, on the ground, has improved significantly in 20 odd years. areas such as tax harassment where we lag big time these organizations have the resources to last out and still go for the big market prize. For medium sized enterprises however it has improved only some what but visibly improved nevertheless. A lot may differ by which State you are in. For small enterprises it has regressed and become worse than it was 20 years back - lack of bank credit, GST, DeMo, market flooded with cheap Chinese products, etc. This ease of doing business on the ground is relative to itself 2 decades ago. That is very different from making a comparison with China which is what my last post and this thread is about. And reality on the ground has little to do with the index put out by the World Bank. That index is bollocks as far as I am concerned and vulnerable to gaming. But even going by the World Bank ranking China is 31 and India is 63 - big difference.

[Sutripta]

Originally Posted by V.Narayan

. And reality on the ground has little to do with the index put out by the World Bank. That index is bollocks as far as I am concerned and vulnerable to gaming.

If the index is prone to being gamed question becomes are we (India) gaming it, and if so to what purpose?

Sutripta

[v1p3r]

Originally Posted by Sutripta

If the index is prone to being gamed question becomes are we (India) gaming it, and if so to what purpose?

Sutripta

https://www.huffingtonpost.in/2018/1...gs_a_23594375/

This should answer your question.