(Image source from: www.ft.com)

With the constant bout of tensions lingering around between the US-China trade wars, there are chances that India might not profit from the unrest. The same is believed to be because of the existing policy barriers to the large scale productions along with the stricter labour laws along with the tough land acquisition process that comes along in the way.

Following the stream of the US-China trade war, some of the global companies have already worked along to diversify their existing manufacturing base and also focusing on moving out some of the production out of China. But, the problem does come full circle suggesting that India is very less likely to experience any form of profit with it.

In addition to that, it is also prompted that India might also end up losing on the investment to some of the regional peers mainly because of the policy barriers to the large scale production that is taking place in this. The combination of the stricter laws and issues with the land acquisition is most likely going to further pose as a problem, Sarthak Gupta, Analyst at The Economist Intelligence Unit (EIU) stated.

Gupta further stated saying, “While the recent corporate tax cut is likely to improve the attractiveness of the Indian business environment, we believe that the country is likely to remain relatively far down the list of favoured manufacturing alternatives to China.”

The existing US-China trade war is consistently set to disrupt the global commerce in South-East Asia, in the province of Vietnam and Thailand mainly. The only thing with this is the fact that it has emerged around as one of the leading destination for the firms who are looking for ways to reduce their reliance on China.

Addressing the issues further, Gupta clarified saying, “Brazil, East Africa and Bangladesh may also become more attractive manufacturing destinations than India over the medium term if their respective policy environments continue to improve at a more rapid pace than India's.”

As per the reports published, it is true that India’s ranking has increased dramatically in the World Bank's Ease of Doing Business index for 2019 along with the boost to the infrastructure investment but the problem still remains with the acquiring of the land for some of the ginormous industrial projects because the process is quite time consuming, expensive and does include stricter labour laws with it.

Aside that, obtaining the permits as well as the approvals can also be quite challenging in the process furthermore. Whether or not the dispute and the trade wars between US and China will bear fruits from India is still something that needs to be talked upon and witnessed over the course of time.

By Somapika Dutta