The benefits will be on the lines of those given to manufacture electronic and medical devices
NEW DELHI: The Prime Minister’s Office, Niti Aayog and the Department for Promotion of Industry and Internal Trade are firming up a plan to offer incentives to attract companies looking to shift manufacturing activities out of China.
The benefits will be on the lines of those given to manufacture of electronic and medical devices. These may include production-linked incentives such as capital expenditure benefits.
There is a growing realisation among multinational firms after the Covid-19 pandemic that capacities cannot be concentrated at one place. India has set up dedicated groups to directly interact with firms that may want to diversify out of China. “More sectors could be offered sops on the lines of electronics and medical devices… Those are being worked out,” a government official told ET.
The official said last year’s corporate tax rate cut and these additional sops would make India — with its large market —as competitive as Vietnam. The DPIIT already has a list of states that have large land banks and are willing to offer quick approvals for interested companies, the official said.
“A number of countries are now keen that their industry diversifies manufacturing… There is going to be a shift,” the official said, adding that India has changed its policies considerably to emerge as an attractive alternative destination. The government has already reached to about 100 multinational companies that have manufacturing units in China and may be keen to move out.