India gets $3b FDI shock
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Mumbai: India lost a $3 billion investment by the China’s largest radial tyre maker because it found the red tape and corruption too cumbersome. The company went to Thailand where the ease of doing business is very efficient.
Similarly the Mumbai-based NRB ball bearings giant is reportedly expanding its business in Thailand instead of India because of the ease of doing business, said Aman Chadha, chairman of the Engineering Export Promotion Council while discussing the reasons for engineering exports going down and how a boost to the manufacturing sector could curb $30-40 billion worth of imports.
Chadha said that the fluctuation in the currency to 68 to the dollar to today’s Rs 63.50 is the “biggest killer of exports.” Exporters are unable to bear the 8-12 percent fluctuation in currency and yet they have to keep their commitments or else Indian exports will get a bad name.
The depreciating rupee had not really helped exports he said, because 40 per cent of engineering exports have imported raw materials, the price of which have gone up because of the depreciating rupee.
There is an urgent need to give a big boost to the high technology capital goods items as also keeping a check on flooding from China. He said there are at least 79 tariff lines of different engineering products such as which have shown an annual compound average growth of as high as 35 per cent in some cases.
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