Trade Resources Industry Views India Becomes China's New Hot Investment Destination

India Becomes China's New Hot Investment Destination

India Becomes China's New Hot Investment Destination

More and more Chinese enterprises are choosing India as a destination for investment, as the country is becoming more open to foreign capital.
In a keynote speech at the China-India Business Forum in Shanghai, made during his visit to China in May, Indian Prime Minister Narendra Modi expressed his welcome towards foreign investment to his country.

"We do believe that foreign direct investment is important and it will not come in the country without a globally competitive business environment. Therefore, we have rationalized a number of issues which were bothering the investors. Now India is ready for business. You must be sensing the winds of change in India."

Since then, a number of Chinese entrepreneurs including Jack Ma, founder of Alibaba, as well as Wang Jianlin, chairman of Wanda Group, have all visited India to investigate the possibilities for future investment.

Figures show that business visas for Chinese enterprises visiting India have increased by over 30 percent during the first nine months of 2015.

Xiao Taiyuan, an entrepreneur who invested in India's smartphone market, said that the booming market in India is attracting more Chinese firms' investment.

"In India, the entire market is boosting rapidly in spite of the fierce competition. The market might become stable by the year of 2017. This has brought many opportunities to Chinese companies."

For his part, Jin Fuxing from Haier Group, a major Chinese domestic electrical appliance manufacturer, suggested that products from Chinese firms should aim to meet the local demands in India.

He gave an example of one of their refrigerator products' successful development in the country.

"Since many Indian people are vegetarians, they grab food much more frequently from refrigerating compartment, storing fruit and vegetables, than they do from freezer compartments, which store meat. In this way, we develop a new product with the two compartments' positions exchanged, which is contrary to their traditional products. Customers needn't bend down as the new product's refrigerating compartment is set above the freezer one."

However, Chinese enterprises also face a variety of risks by investing, including high implicit costs, disputes between employer and employees, as well as different tax mechanisms.

Li Jian, CEO of a consultancy on investment in India, said that Chinese firms could avoid those risks with the help of relevant professional facilitating agencies.

"Chinese firms should recognize the value of those professional facilitating agencies, no matter whether they focus on tax, laws, labor services or public relations. We should listen to their advice instead of judging our plans simply via our previous experiences in China or other countries."

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