NEW DELHI: India has drawn up a list of ten mega clusters across nine states as the most attractive destinations for companies to set shop based on sectoral requirements and tax incentives to promote the country as an alternative business continuity plan destination amid the ongoing Covid-19 pandemic.
While the Noida-Greater Noida cluster is an electronics hub, Hyderabad is the largest export hub for pharma and vaccine, as per the analysis and these “have the potential of developing into the most fertile grounds for manufacturing rapid economic activity in the country.”
Ahmedabad, Vadodara (Bharuch-Ankleshwar Cluster), Mumbai-Aurangabad, Pune, Bengaluru, Hyderabad, Chennai and Tirupati-Nellore are the other most attractive clusters for investors.
t highlighted India’s three distinct advantages- the recent reduction of corporate taxes for setting up of new industries, being host to Global In-house Centres and Global Centre of Excellence (GCoEs) for several manufacturing companies, and the added attraction of a large domestic market.
The idea is to market Brand India at a time when the country’s FDI inflows fell 1.44% on year to $10.67 billion in the October-December period of FY20.
The United Nations Conference on Trade and Development expects global FDI to shrink 30-40% in FY21 due to the Covid-19 pandemic.
“India is at the cusp of becoming the world’s business and manufacturing destination of choice, driven by proactive policy, technological dexterity, a robust startup ecosystem and innovative disruptions,” said Sanchi Padia, Senior Manager – Invest India and Author of the Report, adding that the report is a showcase of world-class manufacturing ecosystems that the report is a showcase of world-class manufacturing ecosystems that exist in India.
These 10 mega clusters cover about a hundred popular industrial parks and house over 600 Indian and foreign multi-national companies. The analysis also details the state-wise incentive structures in India and sops offered by the centre, exemptions and stamp duty concession, land benefits, power tariff subsidy, capital subsidy, interest subsidy and other sector-specific incentives.
Ease of doing business, cost saving
“India currently has an inventory of around 22 million square feet of ready built industrial space in eight top cities ready to be occupied in 6- 8 weeks,” Invest India and JLL said in their report on great places for manufacturing in India.
Highlighting higher capex savings while operating in India, they said that rented factories for lease tenure of nine years and above can reduce the spend on land and building significantly, bringing down capital investment in the short term.
Similarly, by investing in India, companies can increase their profitability through a three-year special window to book lowest corporate tax of 17.16% for new manufacturing units operationalising before March 31, 2023, and exemption of customs duties under several schemes such as Special Economic Zones and Bonded Manufacturing.
As per the report, India has repealed over 1,000 regulations in the last five years to reduce compliance burden on investors.
Reference By: economictimes.indiatimes/May 20, 2020