India is reportedly working on establishing areas of land that equal twice the size of Luxembourg for companies moving out of China.
Bloomberg News reported that India is setting aside plots of land, adding up to 1,140,611 acres, or roughly twice the size of the small European country of Luxembourg. The land is intended to lure industries moving out of China and to set up shop in India.
“Transparent and speedy land acquisition is one of the factors which can help in boosting [foreign direct investment] inflows,” Rahul Bajoria, senior economist of Barclays Bank, told Bloomberg. “This is one dimension of ease of doing business, and perhaps a more comprehensive approach is needed to supplement easier access to land.”
India is working on getting power, water, and road access to the land areas. The government has also picked 10 sectors to focus on in the move, including electrical, pharmaceuticals, medical devices, electronics, heavy engineering, solar equipment, food processing, chemicals, and textiles, according to Bloomberg.
“We have the advantage of coastline and ready-made industrial parks with necessary clearance,” Rajat Bhargava, special chief secretary of a southern Indian state’s revenue department. “We are focusing on certain sectors like IT and related manufacturing, food processing, and chemicals and have been holding video conferences with investors.”
The state of Andhra Pradesh has been in contact with several companies from Japan, the United States, and South Korea.
The move comes as countries grapple with the coronavirus, which originated in China.
“We’ve been working on [reducing the reliance of our supply chains in China] over the last few years, but we are now turbocharging that initiative,” Keith Krach, undersecretary for Economic Growth, Energy, and the Environment at the State Department told Reuters.
President Trump has said that he wants to hold China accountable for the virus and the economic damage it has caused.
“We haven’t determined the final amount yet,” Trump said in April. “It’s very substantial. If you take a look at the world — I mean, this is worldwide damage. This is damage to the U.S., but this is damage to the world.”
Secretary of State Mike Pompeo said the first priority, however, is to cope with the virus before holding China accountable.
“Our first priority, unambiguously, is to address the crisis in which we find ourselves as a direct result of this virus that came out of Wuhan, China,” Pompeo told reporters. “We’ve then got to get the economy cranked back up.”
“There’ll be ample time to evaluate how it is we hold accountable those responsible for loss of what is now tens of thousands of American lives and enormous amount of wealth — not only American wealth but the global economy’s devastation as a result of this virus,” Pompeo said.
The Japanese government has also allocated billions of dollars in a stimulus package to help manufacturers move production out of China and into other countries.
The stimulus package, which is to offset the financial hit of the coronavirus, includes 220 billion yen, or $2.2 billion, for companies shifting production from China back to Japan and 23.5 billion yen for companies to shift to other nations, according to Bloomberg in April.
