Union Government of India is planning to offer incentives worth of Rs 1.68 lakh crore to the foreign investors and companies setting up manufacturing units in India as the majority of the countries across the world plan to either slowly phase out from their manufacturing set up in China or reduce their dependence on the manufacturing unit based in China.
According to reports, the government is planning to announce production-based incentives to automobile manufacturers, solar panel makers, and speciality steel to consumer appliance companies, textile units, food processing plants and specialized pharmaceutical product makers among other industrial and manufacturing sectors.
According to reports, India's policy planning body which seemingly means the premier think tank NITI Aayog, is chalking out the plan on the similar lines of the earlier designed scheme to attract companies exiting China.
Tech giants such as Samsung Electronics, Foxconn, and Wistron Corp among others have pledged USD 1.5 billion (over Rs 11,000 crore) of investment to set up massive manufacturing units in India due to the government's incentive-based scheme which was drawn earlier in the year.
Countries mull exit China
As the world is grappling with the COVID-19 pandemic which affected the economies of all the countries across the world besides causing a massive health crisis, majority of the countries having their manufacturing operations and supply chain through China have mulled on reducing their dependence on China. The major reason to do this is the COVID-19 pandemic compelled the world to rethink its decision of concentrating its manufacturing in one country, place or region, because the supply chain was drastically affected when the COVID-19 originated in China leading to a supply chain cut off.
One of the leading examples to decentralise its manufacturing set up in China is Japan which has announced earlier this month, the incentives to its companies to disinvest from its operations in China and move its operation to the ASEAN countries adding that it will include India and Bangladesh in the list of countries for which subsidies will be offered by the Japanese government to its companies.
China's other extremities
Besides the COVID-19 pandemic, China has also been criticised in the international community over its imposition of draconian national security law in Hong Kong, in turn threatening the autonomy of the trade city. Moreover, the ASEAN countries, Australia, India, Japan and the US have moved against China for its aggression in the South China Sea.
China has also shown aggression towards India along the LAC twice this year. The earlier violent faceoff in June had led to the martyrdom of 20 Indian army soldiers including a commanding rank officer. The latest flare-up occurred in late August during which Indian Army foiled their attempt to unilaterally change status quo on the LAC.
China has been known to strong-arming its way with weaker countries and exercising debt trap policy by luring the countries into offering capital and resources for development.
Sri Lanka remains the prime example of China's debt-trap policy besides some of the African countries.