Karnataka in pursuit of investors exiting China

Karnataka is in aggressive pursuit of firms that are likely to exit China following the Covid-19 outbreak. This, in the background of top diplomats in New Delhi working overtime to de-escalate the situation at the Line of Actual Control (LAC) after a deadly face-off between Indian and Chinese soldiers at Galwan Valley in Ladakh.

After constituting a Special Investment Task Force, headed by the Chief Secretary, the State has identified electronics manufacturing, pharmaceuticals, aerospace, automobile and other sectors as the “go-to sectors” to woo firms looking for alternatives to China. Senior industries department officials are holding country-specific interactions with France, Germany, Japan, South Korea, Taiwan and other nations to market Karnataka’s investment potential. “On Thursday, we held talks with France; next week we are holding talks with Germany; and after that with Japan,” Gaurav Gupta, Principal Secretary, Industries and Commerce Department, told TNSE.

Talks are being held with consulates, ministers, trade bodies, representatives of companies which already have a presence in Karnataka and prospective investors during the online country-specific meetings.Well aware of the complexities of the job, the task force includes nominees from Japan External Trade Organization, Korea Trade Investment Promotion Agency, Korean Chamber of Commerce,  Taiwan External Trade Development Council, French Chamber of Commerce and Industry, Indo-German Chamber of Commerce and Enterprise of Singapore. The task force will also help the State formulate special incentive packages and facilitation to attract investments. This is because the State is of the view that China may not be able to retain its position as the world’s largest factory in the post-Covid world order, and India is seen as an alternative manufacturing hub.

Many firms, the officials said, have made up their mind and are identifying local partners to tie up with, and the State is engaging with them. There will be no country-barrier for the firms that have existing production lines or partners in India. That makes it easy for them to relocate, while others need to find local partners if they decide to relocate.

“We are pursuing it very seriously and hope to get a good response in the next few months,” Karnataka Industries Minister Jagadish Shettar told The New Sunday Express. Senior officers are holding regular meetings with several countries while the State Government is also taking measures to ensure ease-of-doing-business in the State, he added.

To complement the government’s efforts, the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has also constituted its task force of experts. “We are identifying countries interested in shifting their businesses to Karnataka and reaching out to prospective investors through various channels, including trade bodies in different countries. We are also taking help from respective consulates,” said FKCCI president C R Janardhana. People who have established industries in Singapore and China are also part of the FKCCI task force.

The competition may be tough, but the FKCCI chief sees it as a doable task. “Over 1,000 companies have already left China and many more may move out. Huge domestic market, friendly workforce, good infrastructure, air connectivity, uniform tax, abundant energy and availability of land will work to the State’s advantage. All these aspects are highlighted during our talks with prospective investors,” he added.

The Strategy
Task force headed by Chief Secretary/FKCCI task force consisting of experts
Aerospace, electronics manufacturing, pharma identified as go-to sectors
Country-specific meetings held to market state’s investment potential
Friendly-workforce, good infrastructure, air connectivity, availability of land, ease-of-doing business  highlighted
Brand Bengaluru is an added advantage-The New Indian Express

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