- Financial incentives such as preferential tax rates and the tax holiday provided by Vietnam to lure companies are among measures being considered
- Industries identified for incentives include electronics, consumer appliances and electric vehicles apart from two other industries
- Plans to set up affordable industrial zones across India’s coastline and giving preference to local manufacturers in government procurement
- The government has identified more than 150 items where it feels exporters can increase business with China
India is weighing offering incentives to attract companies moving out of China amid its trade war with the US.
Economies, including Vietnam and Malaysia, have benefited from businesses trying to sidestep tariffs, while India has largely missed out on any investment gains. The trade ministry’s effort is part of a larger plan to cut reliance on imports, while boosting exports, and needs Finance Minister Nirmala Sitharaman’s approval.
Lucrative deals in the kitty
Financial incentives such as preferential tax rates and the tax holiday provided by Vietnam to lure companies are among measures being considered. Industries identified for incentives include electronics, consumer appliances and electric vehicles apart from two other industries, a person familiar with the development said to Bloomberg.
Other measures include setting up affordable industrial zones across India’s coastline and giving preference to local manufacturers in government procurement as an incentive to win over companies looking for an alternative production base, according to the trade ministry document circulated to stakeholders.
The plan will help grow India’s manufacturing base and will aid Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative, which aims to boost manufacturing to 25 per cent of the economy by 2020. Doing that will help India narrow its huge trade deficit with China, its largest commercial partner.
There is also an effort to step up exports in sectors vacated by the US due to the trade standoff. The government has identified more than 150 items where it feels exporters can increase business with China.
