Why India Is The Preferred Tech Investment Destination After US-China Skirmish?
The tension between U.S. and China is going to be a benefit for India. In fact, the boost it needs to become a global tech hub is all there. The only thing, experts believe is that India needs to address longstanding roadblocks including excessive red tape and government inefficiency.
“Washington’s technology cold war with Beijing has resulted in strategic decoupling, promoting manufacturing supply chains to shift to new locations,” according to a report released Tuesday from the Asia-based Hinrich Foundation set up by U.S. entrepreneur Merle Hinrich. India finds itself well-positioned to absorb these supply chains.”
According to the foundation, there are many other factors working in India’s favor. One big factor is the investment that India is doing in infrastructure and manpower development. U.S. President Joe Biden has already given a call for “China-free” supply chains in certain sectors. Further, India is going to benefit hugely with its membership in the Quad grouping with the U.S., Australia, and Japan.
Many tech companies are shifting their production from China into other parts of South East Asia and India is a preferred destination. Blame it on the scare that China has created over the origins of the pandemic and then its growing tension with America.
As a tech hub, India still has to compete is developing its manufacturing prowess. China, currently dominates that market still. On its part, India could be lobbying with Washington, to persuade top chipmakers like Taiwan Semiconductor Manufacturing Co. to open certain plants in the South Asian country, the Hinrich Foundation has confirmed through its report.
The biggest dampeners in India are factors that are intangible like excessive regulations, taxes and a lack of coordination between the central and state levels of government that have deterred investors repeatedly.
India is also developing its own technology which has started to compete in the world market. Its own home grown brands are starting to dominate the local markets. Also, its trade policies and vaccine diplomacy has shown it as an emerging nation that is looking at attracting FDI in manufacturing facilities. State governments have already started giving signals to the Centre that they are serious at opening the flood gates with usable land, manpower and provision of technical knowhow. These include Karnataka, Maharashtra, Gujarat to name a few eager states that are also heavily investing in renewable energy sources.