Facebook's USD 5.7 billion investment in Reliance Jio in the midst of coronavirus pandemic is a reflection of the faith that foreign companies have in Indian economy's potential and future growth, a top US-based India-centric business advocacy group has said.
In an interview to PTI, US India Strategic and Partnership Forum (USISPF) president Mukesh Aghi said the COVID-19 crisis has offered India the best opportunity to attract foreign investment and replace China as the world's manufacturing hub.
"I strongly feel that once the COVID-19 crisis ends, India will have the best opportunity to attract hundreds of these (foreign) companies into the country," Aghi told PTI. It will not only create jobs but also bring in investments and keep the Indian economy's momentum going.
The multi-billion-dollar investment announced by Facebook in an Indian company in the middle of the coronavirus pandemic shows that India is still a very attractive market on the digital commerce side, he said.
"The partnership between Facebook and Jio is a win-win value proposition for not only for both companies but also for citizens and consumers in India. It also reflects the faith of foreign companies in the potential of India's economy and future growth," Aghi said.
It is important that "India builds confidence" among foreign companies by assuring them of providing a "level playing field" as well as "transparency and stability" in policy making, Aghi said.
According to Aghi, India has brought in reforms in its corporate tax structure but it must look at its labour laws and land reform as well. The momentum has to keep moving in the right direction to build the confidence of foreign investors, he asserted.
Because of the bitter experience that the US companies are having in China during this pandemic, wherein they cannot move their goods because of the many restrictions imposed by Beijing on them, the sentiment among these companies is: "We have to look beyond China and very fast," he said.
Observing that tensions between China and the rest of the world are going to rise in future due to the COVID-19 crisis, Aghi referred to the USD 2 billion package announced by Japan for its companies to move their manufacturing base away from China. "You will see more and more of that happening," he said.
The COVID-19 crisis has shown that India can take up the role of global economic leader as it is taking care of its citizens while also helping its friends and people across the globe, he said. "It has shown that in time of need, India as a friend can step up. So, from a global leadership perspective, I think the stature of India has gone up," Aghi said.
He further said that USISPF has estimated that for India to become a USD 5 trillion economy, it needs roughly USD 100 billion-dollar investment on an annual basis. At the moment, not only US companies but other companies too are looking for an alternative to China, he said. "And If India plays its cards right, a lot of that (companies) can move into India, he said.