India – An alternative investment destination for United States

The USA is backing India as an alternative investment destination for China.

India and America have robust business relations for years. Several American companies are investing to fulfill the indispensable needs of the Indian market. From online Google to Coca-cola, Indian consumers always consider American companies as better options. Renowned companies like Ford India, American Express, Adobe, Hewlett Packard, and many have invested in India. Not forgetting to mention, they have gained a substantial business out of it.

The recent pandemic has created a rivalry between China and the US due to which India has clinched its position as an alternative investor. As the deadly coronavirus has thrown a reckless impact on the economy major countries like the US, Taiwan has been eyeing on India as an alternative. If India plays its cards rightly, it could soar up many opportunities and dwells great business outcome. US investment in India could be beneficial for both countries due to many reasons. 

Relations between India and the USA

The bilateral cooperation between India and the US has flourished into a global strategic partnership. The bilateral relationship between the two countries has been in various sectors including defense and security, science and technology, cybersecurity, space technology and application, environment, agriculture and health, and much more. The US is one of the prominent investors in India with an investment of $ between March 2019 and April 2000. Imports from the US to India in the year 2018 – 2019 sum up to $35.5bn while exports value $52.4 bn. 

Our prime minister has shown effortless positive responses towards trade and foreign relationships. Infrastructure development and norms have been good in a country to welcome different foreign industries. India has been considered as Alternative investment destination for the US, many American companies are looking up in India for shifting their factories from China. US and China are a leader in the economy and they have been trading partners globally. The two countries equip with their complementary strength. The USA has its powerful technological strength while china has high manpower and manufacturing capacity. 

India – An alternative option

The current scenario opens up an opportunity for global companies to explore countries that have a possible prospectus for US-based companies. Developing and transitioning economies like India not only assures a stable manufacturing base but also sets forth a secure consumption market for goods. 

  • India promotes a favorable business environment with a robust financial and law system to support any business startups.
  • There are many policy reforms and incentives that have been implemented in the country recently. 
  • Beyond FDI norms, the Indian government is supporting investors through capital subsidies, tariff reduction, and much more. 
  • Low wage workforce to produce high-quality high technological goods and services for long term work. 
  • Reduced manufacturing costs through the Make in India initiative. 
  • Highly developed infrastructure with 12 major ports and 200 intermediate ports for facilitating trade throughout the country and globally. 

On the final day of the trip in India, United States president, Donald Trump, had a conversation with the head of different sectors from steel, automobiles, hospitality, pharma, and Information technology. While his interaction with CEOs and promoters from different corporate sectors held at the US embassy, Trump appreciates the investment in the United States and encouraged each of them to invest more. Invest in US stocks from India can return profitable in the present situation. Once you are aware of basic things, you could make most of the opportunity. Before investing know about tax implications and challenges.

Trump’s visit to India 

Decades ago U.S producers opt China for manufacturing and sourcing due to its cost. Sadly, coronavirus has closed all gateway economies of the Western world and worsen the public relations for China. 

U.S president was welcomed to India with an aim to build new strategic interests. The trip was meant to grow to reveal the strong and enduring ties between the two strong countries. On US President Donald Trump’s visit to India, he wooed to India industry leader to reduce regulations in the US for welcoming overseas investment to boost the economy in his country.  Also, Trump assured that some of the regulators have to undergo the statutory processes while they will cut some of the regulations which would eventually result in big differences. Several representatives of the US companies seek to propose the Indian government to offer incentives that would ease the proliferation of US business. 

The president visit has ended successfully in India but there is no trade deal signed between both parties. India was willing to be reconciled, but the US insists on waiting for a more ambitious deal. We strongly believe that Trump and Modi deals would improve economic ties in the future. 

Present Scenario 

U.S companies are leaving china due to trade war and even more due to pandemic. Since last year, some companies were rethinking to change their supply chain. They persist in convincing their Chinese partners to relocate. It can be either to South Asia to avoid high tariffs or choosing to outsource from China. As per reports, the companies will be inclined to spread risks due to pandemic and this is the reason they would choose other options for investing. 

Amid of Coronovairus, now more and more companies are considering India as a better option rather than China for investment. For this, Prime Minister Narendra Modi has been in a constant meeting with chief ministers. He’s been approaching new possibilities to attract investment from other countries. State chief minister along with PM has been working on strategies to welcome industries on the state level. The government wants to gain more investment in India. 

Final Words

The relation between India and the US has been substantially grown for the last 15 years. The bilateral relationship has undergone a significant transformation and proved beneficial for both countries. The last visit by Trump in February 2020 has been symbolic and contributed towards a bilateral relationship. While securing the US as a primary security partner, the main focus of the visit was strengthening the bond between both leaders. Trump investment in India is an important foundation for both countries, the mutual cooperation of two countries would grow business as well as the spread of coronavirus in their territory.