South Korean Firms Want To Ditch China, Move Manufacturing To India; Hyundai, Posco In Talks
Due to the coronavirus pandemic, the world economy has degraded to dreadful levels. With economies of different countries coming to a halt, countries having their manufacturing hubs in China are now looking forward to shifting their units to countries like India.
In one such scenario, South Korean companies are in talks to pull out their manufacturing units from the communist nation to India, according to a Times of India report, dated April 14.
Koreans Request for Iron & Steel Cos in India
As going gets tough in China’s controlled economy, more and more Korean companies are pulling out of China, and are looking for ‘favorable’ nations like India. India is all set to become a manufacturing base for Korean companies for their global markets.
Reports suggest that the Korean consulate in Chennai, has been working with many requests from their companies with established units in China. While some of these companies are in their preliminary stages, others have reached the advanced stages of discussion.
According to the deputy consul general for the Consulate General of The Republic of Korea, the Koreans have already made requests for two iron and steel companies, some start-ups and one from the hospitality sector, to transfer these units from China to India.
The Indian govt previously showed interest in setting up Posco and Hyundai Steel factories in Andhra Pradesh, while also informing that the two companies agreed to setup units in the state if they made some investments.
Korea Realises Japan’s Advantageous Decision made in the 80’s
Now that Korea is looking forward to shifting its manufacturing units from China to India, amidst trade tensions rising up between Chinia and the US, Korea realizes that Japan was rather smart to have moved into the Indian market, as early as the 1980’s, when Suzuki had set up its first car manufacturing plant near New Delhi, while Korea on the other hand, got caught up with China.
However, due to the ongoing deadly Covid pandemic, there are going to be delays in the process. India’s capacity to invest in these two companies would also depend on how soon the economy restarts. The demand too is low due to this commotion.
Besides the two behemoths, there are a number of companies which want to come to India.
Many Indian lobbyists and industrialists are excitedly looking forward to attract other such companies that want to move from the Chinese market into India. This sentiment has only risen since the outbreak of novel coronavirus.
HDFC Bank chairman Deepak Parekh recently said the Indian government must open up and receive Japanese companies that want to get out of China as part of de-risking strategy by the Japanese government, which has reportedly invest about $2 billion to bring companies out of the communist nation.
He continues that the govt should make it easy for the Japanese to come to India rather than them going to Malaysia, Vietnam or Thailand. States have to take the initiative and offer them 2,000 to 5,000 acres in some special zone where they do not have to look for land or building approvals.