India is planning to offer 324 companies including Tesla Inc and GlaxoSmithKline Plc incentives to set up factories in the South Asian nation in a bid to capitalise from the trade war between China and the US, according to a document seen by Bloomberg.
The government proposes to provide the manufacturers land to set up a factory along with power, water and road access, according to draft of the document prepared by the Department for Promotion of Industry and Internal Trade and Invest India.
Other companies that officials will reach out to include Eli Lilly & Co, South Korea’s Hanwha Chemical Corp, and Taiwan’s Hon Hai Precision
While the trade war has benefited countries such as Vietnam and Malaysia, rigid land acquisition rules and labour laws have prompted investors to largely ignore India when looking for alternatives to China. The latest proposal may reduce red tape, and set the nation, which expanded at the slowest pace in six years last quarter, on a path to double its gross domestic product to
$5 trillion by 2025 — a goal set Prime Minister Narendra Modi.
“While in the initial leg of relocation we have seen companies moving to Vietnam, I don’t think it is too late for India to start making an effort,” said Sonal Varma, chief economist at Nomura Holdings Inc.