According to sources, India is developing a land pool nearly double the size of Luxembourg to lure businesses moving out of China.
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How Did This Happen?
As per the information given by sources, a total area of 461,589 hectares has been identified across the country for the purpose, asking not to be identified because they aren’t authorized to speak to the media.
Further, it includes 115,131 hectares of existing industrial land in states such as Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh.
According to the World Bank, Luxembourg is spread across 243,000 hectares.
So far, the land has been one of the biggest impediments for companies looking to invest in India, with the plans of Saudi Aramco to Posco frustrated by delays in the acquisition.
Moreover, Prime Minister Narendra Modi’s administration is working with state governments to change that as investors seek to reduce reliance on China as a manufacturing base in the aftermath of the Covid-19 outbreak and the resultant supply disruption.
How Would This Help?
Currently, investors keen on setting up a factory in India need to acquire land on their own.
In some cases, this process delays the project as it involves negotiating with small plot owners to part with their holding.
However, providing land with power, water and road access may help attract new investments to an economy that was slowing even before the virus hit, and is now staring at a rare contraction as a nationwide lockdown hit consumption.
For doing so, the government has hand-picked 10 sectors — electrical, pharmaceuticals, medical devices, electronics, heavy engineering, solar equipment, food processing, chemicals and textiles — as focus areas for promoting manufacturing.
Further, it has asked embassies abroad to identify companies scouting for options.
Which Countries Are Showing Interest?
In response, Invest India, the government’s investment agency, has received inquiries mainly from Japan, the U.S., South Korea and China, expressing interest in relocating to Asia’s third-largest economy, according to the sources.
Basically, these four countries are among India’s top 12 trading partners, accounting for total bilateral trade of $179.27 billion.
According to the government data, the foreign direct investments by the four nations between April 2000 and December 2019 stands at over $68 billion.
Further, making unused land available in special economic zones, which already have a robust infrastructure in place, is also being examined.
Also, a detailed scheme for attracting foreign investments is expected to be finalized by the end of the month.
What About Other Initiatives?
On Thursday, the Uttar Pradesh government passed an ordinance to suspend most of the labour laws in the state, in order to attract new companies to invest in the state amid the ongoing coronavirus crisis.
According to them, a total of 38 labour laws have been suspended and only four laws that will continue to be applicable.
That includes Section 5 of the Payment of Wages Act, 1936, Workmen Compensation Act, 1932, Bonded Labour System (Abolition) Act, 1976, and the Building and Other Construction Workers Act, 1996.
But, the ordinance will become law only after it receives the president’s assent.
While an official statement said the decision to exempt businesses from the purview of almost all labour laws was taken as economic and business activities in the state have been badly affected by the coronavirus spread.
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