India has a great opportunity to replace China as the new manufacturing hub. Given the intensifying trade tirade between China and the US, leading MNCs from Taiwan and other nations are contemplating to shift operations from China to newer destinations which can provide lower tariffs, economical manpower and a friendly environment. India seems to be fitting the specifications perfectly.
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Amid the escalating trade war between the US and China, Beijing has started to impose increased taxes on Taiwanese products and this has raised serious concerns amongst leading manufacturers. India, the US and other Southeast Nations are bound to be benefitting from this scenario as organisations from Taiwan will now be looking for new manufacturing bases. India is set to take leverage from this situation and work towards its ambition to become the new hub of manufacturing.
India and other Southeast nations have become tempting havens for the firms wishing to move out of China amid wage concerns. In the 1990s the Taiwanese firms were tempted to set up factories in China given the low production and labour costs that China offered. But now the situation is different and increase taxes are hurting these firms badly.
Even before the trade war started, companies had already started withdrawing from China given the increased cost of productions in China. Beijing has been victimised by its own success and this would be the irony of China’s grand success story.
Now it depends on India’s outreach to these organisations so as to create a win-win situation for itself. If India can attract Taiwanese companies, to start with, then Delhi can counter China’s growing economic influence in the region. India has a golden opportunity and this needs to be bagged with both the hands.