Embargo on imports from a neighbouring country would send a chilling signal to foreign investors who look for transparency and companies with manufacturing units in India had requested the government to publish any change in port policy “to provide the business community with the visibility they need to function”, says United States-India Strategic Partnership Forum.
American companies looking at destinations other than China due to global geopolitical pressures are now increasingly favouring Vietnam, Cambodia and Thailand, CEO of industry body United States-India Strategic Partnership Forum (USISPF) Mukesh Aghi has said.
While the forum is advocating India not just as a preferred market but also as an export hub, many of its member firms have raised concerns about sudden policy changes impacting inbound global investments.
Companies fear returns on long-term investments getting hurt, Aghi said citing the recent move by some customs authorities to detain import consignments from China.
On the issue of Chinese goods being detained at Indian ports, the forum argued that the embargo on imports from a neighbouring country would send a chilling signal to foreign investors who look for transparency. Member companies with manufacturing units in India had requested the government to publish any change in port policy “to provide the business community with the visibility they need to function”.
Many American companies, including Apple, have tieups with manufacturing companies based in China, thereby impacting the business due to the customs disruption. However, Foxconn and Wistron, iPhone manufacturers for Apple, recently applied for the production-linked incentive scheme seeking to establish India as an export hub.
Aghi said frequent changes in e-commerce and foreign direct investment rules, besides the recent customs problems, were also hurdles for multinationals.
“US firms will not abandon China since they want access to the Chinese market. They will look at other geographies because of current experience and start manufacturing for that local domain, be it India or other domains,” Aghi said.
But somehow, countries like Vietnam, Thailand and Cambodia are able to attract a lot of US firms rather than them coming to India, he added.
“In the e-commerce sector, as Walmart came in and acquired equity in Flipkart, the policy got changed. You can’t have changes coming in like this because the boardrooms are saying we want…