India welcomes investments from regional rivals

India stakes place in global value chain . . .

On the back of India’s ‘Make in India’ policy – Prime Minister Narendra Modi’s broad initiative for transforming India into an Asian manufacturing powerhouse – foreign investment in the country’s manufacturing sector has quickened. While Japan and South Korea both have a long-established presence in the country, India has seen a recent surge in investment from China, a perennial regional rival.

Enter China . . .

South Korean and Japanese firms have invested steadily in India since it opened to foreign investment in the 1990s, and have typically focused on automotive manufacturing in Southern India. Chinese money, however, is focusing on India’s tech sector. Last year saw more than US$5 billion invested in Indian technology startup companies backed by Chinese technology giants such as Alibaba, Tencent, and Xiaomi. Aided by Modi’s ‘Start-up India’ program, Chinese tech firms have turned to India as investment opportunities at home dry up.

Can Canada join the party?

India is a market that Canadian firms have had limited success in cracking. Hampered by strained bilateral ties, talks of a free-trade agreement between India and Canada have been put on hold. Despite troubles at the government level, results from APF Canada’s Survey of Asian Views on Economic Engagement with Canada suggest that nearly half of all surveyed business leaders in India believe in the importance of expanded trade with Canada, and that 80% of business leaders support signing a Canada-India FTA.