Due to growing tensions between China and the United States and changes in China’s business environment, 50 American companies are preparing to close their operations in China. These companies are now preparing to shift operations from China to other countries. India will benefit the most from this as 30% of these companies can switch to India for manufacturing and other operations.
A report by the American Chamber of Commerce said that of the 50 American companies preparing to leave China, 15 want to invest in India. The total investment in these 50 companies is Rs 1,200 crore. The U.S. Chamber of Commerce has 306 companies as members.
Investors are starting to like India
The report said India is becoming the choice of investors, after Mexico, the United States and Europe. Last year, India ranked fifth in terms of investment. This year India has ranked second.
Southeast Asian countries Indonesia, Singapore and Malaysia are at the forefront of investor choice. But China continues to lose its status as a priority for investors.
The report has stated that India is paying increasing attention to management-related enterprises. 40% of U.S. companies that planned to invest in China last year are now considering investing in India. Especially in the field of management consulting, 54% of companies have changed their investment direction in India.
India’s investment environment has improved after the COVID-19 epidemic
Apart from this, the apparel and manufacturing industries have also expressed their preference for investment in India. A growing number of U.S. businesses and U.S. Chamber of Commerce members acknowledge that India has a better investment climate. India’s big market also attracts them here.
After the COVID-19 epidemic, China’s investment environment has undergone many major changes that foreign companies do not like. Xi Jinping’s government has made policy changes to address challenges such as unemployment and an aging population, but the changes have shaken investor confidence.
In China, the unemployment rate among youth aged 16 to 24 has reached 21.3%, the highest level in 30 years. The aging of the dragon family has also become a major problem, affecting production capacity. Along with these economic and social challenges, questions have been raised about China’s economic stability.
