Encouragement of migration of industries from China to India

India can learn from Vietnam on the approach for granting new approvals - focusing on how much FDI and how many jobs and staying out of the way

The starting up of a business in India is challenging due to the number of approvals needed, and the lack of a ready infrastructure to move in and start in no time.
The starting up of a business in India is challenging due to the number of approvals needed, and the lack of a ready infrastructure to move in and start in no time.

India is unable to exploit the situation despite a superior manpower pool

As businesses are leaving China, Vietnam (another communist country) is taking the major share, and India is unable to exploit the situation despite manpower pool far superior than that of Vietnam. Why?

There is only one reason

The starting up of a business in India is challenging due to the number of approvals needed, and the lack of a ready infrastructure to move in and start in no time. Bureaucracy is an old reason that has been a successful impediment for 70+ years. So, less said the better.

I had lived in Vietnam for about 25 years. Their most striking quality is simplicity in approach to an object, sharply in focus. The object is Foreign Direct Investment (FDI) and Jobs. No official asks you more than “How much will you invest and how many jobs will you create?” The focus is on FDI. Produce here to export anywhere. There are many operating problems and expenses in Vietnam but all are overlooked as business costs for the ease of starting a business in Vietnam.

The Government has to pass an ordinance immediately. “Instant approvals for FDI in manufacturing/services,” and “Make here to export anywhere scheme.” PSUs to set up Industrial Parks with government authority to license instantly.

The Industrial Policy is clearly stated. The “No List” is clear. The areas of natural resource exploitation, retail, etc., are for the Vietnamese, the prohibited list. Manufacturing of any type is welcome. The labour law is simple. It is contractual. There is a social Insurance payable to the employee and transferrable from employer to employer. A minimum wage is prescribed and rest can be negotiated.

To set up a business in a pre-approved industrial park doesn’t need any governmental approval. The Industrial Park will grant the license obtained from the local authority. The negotiation can be once or twice and the construction can start within a week.

Now to do this in India?

Concept

  • The Government has to pass an ordinance immediately. “Instant approvals for FDI in manufacturing/services,” and “Make here to export anywhere scheme.” PSUs to set up Industrial Parks with government authority to license instantly.

Operation

In Industrial Zones to be set up by PSUs, government approvals can be instant for FDI projects.

  • Layout the guidelines for approval and most importantly state the prohibited list. The rest of it is approved for FDI.
  • Identify suitable PSUs to make Industrial Parks of not more than 1000 acres each

PSUs must be
a) Financially sound
b) Managerially capable
c) Have a land bank
If all three are not with the same PSU, allow partnership between them. For Eg:- Railways or Visakhapatnam Steel has land and SBI, BHEL, AMUL, or NTPC has management capacity and capital, they form a partnership.

  • PSUs with land and infrastructure must be chosen for speed in execution.
  • Don’t make it more than 1000 acres. Size attracts un-wanted attention, politics.
  • Make 12 such parks across the country which have a good connection to port or Highway/Railway.
  • The Industrial Parks are purely for SME/MSME only. The land requirement will not be more than 10 acres maximum per unit. The land is available on rental or purchase for the Industrial units. All services are chargeable in the Industrial Park.
  • The Industrial Parks must have basic infrastructure of roads, water, power, customs/GST office and normal ETP, canteen and small office facilities. No need to go out. Practically the government inside the park.
  • Industrial Park must have a small workshop.
  • All recruitments in Industrial Park can be contractual and voluntary. Severance of contract with 3 months’ notice possible. The minimum wage applies. PF, ESI, gratuity rules apply. All employee benefits are transferable from one employer to another when the worker moves. No trade union in the Industrial Park. Since these Industrial Parks are owned by PSUs they can have special status on labour laws as practically it will be government-owned special Industrial Parks.
  • Industrial Parks will have labour recruitment facilitation center. No FDI enterprise needs to go searching.
  • Labour welfare center in the park to resolve issues.
  • Park will have a small health care center for any emergency.

Since the Industrial Parks will be PSU owned, public confidence & investor confidence will be higher. Since they are government-owned parks, they can enjoy a special status.

Action

  • The list of PSUs must be ready in 2-3 weeks. If NCLT companies that have a large debt to PSU Banks have land and infrastructure, take it immediately. Transfer it to a PSU. Make an Industrial Park out of that. The Industrial Parks must be operational by Dec 2020.
  • They should be completely managed by the PSU. The PSU will have its officer as the CEO of the park.
  • They should be empowered to give the license for FDI within 72 hrs.
  • Ask the Indian Embassy everywhere to market it. Each park can target a country USA, Germany, Japan, etc.
  • Any applicant who obtains a license has to start construction within 120 days or they forfeit their deposit.

Incentives

  • The parks (PSU owners) must have a 10-year Income Tax holiday. 100% depreciation in 2 years.
  • The FDI in all the parks in the first 12 months i.e., from January 2021 to Dec 2021 will have 3 years Income Tax holiday.
  • Contractual Employment with purely market-determined wages. No trade union and labour protected as all monetary benefits as per existing law are given – The biggest attraction for FDI.

Benefits

  • When timelines are put on either side, 72 hours for the license, and 120 days to start construction, then the potential investors take it seriously.
  • Railways/PSUs that have land can make use of it immediately.
  • Since the Industrial Parks will be PSU owned, public confidence & investor confidence will be higher. Since they are government-owned parks, they can enjoy a special status.
  • Industrial Parks can have partner banks. Indian lenders will provide only working capital as per their norms to FDI investors. No questions asked about the FDI except that the prohibited list is not allowed.
  • Speed in licensing will bring in investors and if the first 50 come in by goodwill, more will migrate.
  • FDIs will give jobs and exports to India. GST on local sales. 3 years Income Tax waiver will be more than made up if jobs and exports came in. A quick boost to the economy.
  • Ease in managing labour, a big attraction for FDI.

Note:
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.

127 COMMENTS

  1. It is a very enriching article to read. The points are very straight forward. How ever the fact is that there are implementation level challenges due to lobbying and palm greasing of the people in power and those who are not
    Hope this reaches the desk of the implementors for a head start

  2. GOI must implement a reform agenda in FDI policy taking cognisance of these valuable points in realising India’s full potential. Thank you for your wisdom sir.

  3. GOI must implement a reform agenda in FDI policy taking congizance of these valuable points in realising India’s full potential. Thank you for your wisdom sir.

  4. I really appreciate the insight provided by comparing the contrasting governments in FDI approvals. Easing the rules for FDI is long overdue. The quicker the FDI is implemented the sooner we race towards economic normalcy. Hope to see the government takes steps towards easing the rules than being stringent that harms us.

  5. Very correct saying uncle…. it is most difficult to run business in India…. late application process n then late approval too…. bribe this n that…. too much approvals……

  6. Brilliant Article I have ever come across.. very mindful.. Actually made me understand the economy and take a closer look at almost everything.. kudos to the writer…

  7. Very interesting article.. Some key points that catches my attention are :

    1. How Vietnam expands their business despite of facing many operation problems. However as per my knowledge the Ease of doing business on papers , India ranks 63 while that of Vietnam is 70. However granting the business opportunity in Vietnam is comparatively easy.

    2. Making PSU Sound with partnership model.

    3. NCLT Company infrastructure to acquire in order to convert them in the Industrial parks.

    4. Tax exemption must be provided considering them as a SEZ to increase the economy of the nation.

    5. The aforesaid points can help in increasing FDI .

  8. Good Article. Suggestions made appears to be implementable. Ease of doing business is one area were successive Governments are trying their hand, though much needs to be done.

  9. Good viewpoint for Indian ecosystem to explore. Given the potential of supply chain shift likely to happen to india in view of the covid 19 situation, it is important that proper steps are taken to ease the investment of FDI into India.

  10. Very good article . As you mentioned rules should be made simple to start manufacturing for for foreign investors and Indian manpower should get into the mode of quality thinking to make world class products as China does for Apple.

  11. Excellent article & very well formalized strategy; need of the hour to attract FDI’s into India.

    Ample business opportunities are on the anvil for India, especially when countries like USA, South Korea, Japan etc are seriously contemplating to pull out their manufacturing activities from China in a phased manner.

    With talent pool available in India and make in India initiative of GOI, India can do wonders and sky is the limit. As author mentioned, the approval process in India is quite cumbersome and time consuming, which needs to be addressed if we are serious about attracting FDIs.

    I am aware that, Author himself is a visionary and a successful entrepreneur in Vietnam. I wish him all the very best in all his endeavours.

  12. Mr Nandakumar raises a lot of pertinent good points which the Government should evaluate to increase the competitiveness of India

    The complexity and size of the investment would dictate how fast approvals can be obtained . There would also be norms required for capital structures especially to have protective covenants to provide adequate safeguard for financing raised through debt as well ensure ESG norms are adhered to .

    Best Wishes

    Anand

  13. india had tried export promotion zones in the past.

    what is required for FDI to invest also the necessary work permits ( tall order on India) protection of patents , technology etc

    if assurances and laws are enacted it will work

  14. Intresting points made here. Vietnam has made many advances in industrializing itself. A lot of the credit goes to the forward looking policies. India needs to simplify its FDI regulations. We need to become the first choice of companies looking at a China+ world in the aftermath of COVID 19.

  15. A pragmatic solution, beautifully articulated , showing the way to the government for attracting the necessary FDI. The land reforms can also be taken up immediately. The time bureaucracy comes of age and take the lead out of this article.

  16. * 🥀 Hearty congratulations 🌷 *

    The traders of the country are seen standing with the country, putting aside their business profits.

    Yesterday, Noida traders canceled their China orders for the mall.

    Till this evening, about Rs. 1500 crores of orders have been cancelled, just from NCR and if the fury of China is seen, then the orders of about 2 billion USD have been CANCELLED from the whole country.

    That’s why today China’s government agency Xinhua held a press conference, in which the Chinese used words like “rein in Delhi”.

    At present, our cancelled orders were worth 2 billion USD. WHAT will happen the day, when orders worth 62 billion USD are cancelled?

    The traders of our country can bring them on their knees without any official call, those who vetoed us on NSG. Now if we consumers stop buying Chinese goods, then the traders will never buy from China.

    Nevertheless, the traders who boycotted Chinese goods yesterday, are truly worthy of respect.

    When the people are united in the interest of the country, then it makes the world realise the power of that country, & we can retain our sovereignty.

    If India is taken over & controlled by China tomorrow, we ourselves will be responsible for it.
    The British also made us slaves after trading on a massive scale. Then, Indians were unaware. Now we should be sensible.

    Adopt indigenous, save the country.

    India is the Second most populous country in the world. Avoid buying foreign brands, if Indian brand is available. I do. Even if the discount is less or price, slightly higher.

    We forward jokes …
    Better Forward this message.
    Start a movement ……!
    Last year, during Eid, Diwali & Christmas, under the 1st campaign, people did not buy colourful Chinese lights. Then, 20% of China’s goods remained unsold and China was furious.

    True, you & I are very small & insignificant. Yet, it makes a difference. Try it out.
     

               

    • Well thought and written. Looks so practical But I have 2 concerns which unless addressed, FDIs will remain a day dream-
      1. India and Indians must stop moral policing and lynching in the names of Religion, caste and food habits. No one wants to invest in a country where there is a potential of social unrest.
      2. To make it look serious and believable, Government must facilitate reopening of all factories which are closed for whatsoever reasons.

    • If Trumps goes mad , China will become bankrupt. Africa is huge importer of Chinese goods and locals hate them. Golden chance for Indians to capture these markets. It is hell for Indians to do exports. All govt has to do is open warehouses in US and Africa, buy goods from manufacturers and do counter sale. This is the strategy Chinese adopt.

      All gulf countries are indirectly the cause for Islamic terrorism in India. At present, they are suffering from oil price, but their weak point is Indian workforce and Indian food. Indians should be encouraged to work in Japan and East Asian countries and discourage food exports to gulf.

      • These kinds of anonymous emails will not be published in the future. Got proof? If yes, you would have publicly come out with your ID. Otherwise, this is just PFA.

  17. Great article by the author. The problem with PSUs is beauracracy and they work on kickbacks. This needs to be controlled. Also we need to speedup land acquisition and fair compensation to the land owners without middlemen. We were discussing about how India can attract companies from China and here is an article which already has that information.

  18. Very thoughtful and insightful eye opener for Indian Governments particularly in this vulnerable situation. I am sure NAMO n Team should be mulling on not missing this much awaited opportunity which has come accidentally either by nature or with one’s ill intention. It’s a blessing in disguise for India.

    I always feel proud for the very close association I had during the last 3 decades with Nandaa Kumar Sir who mastered inter and intra Country investments n trade. I am sure, very soon my former Boss (NK Sir) would play a major n key role in collaboration with GoI to make Billions of Indians dream come TRUE.

    All the very best Sir

  19. Beautifully penned article. Thought provoking. The ideas mentioned can be easily executed by the government. Hopefully the article reaches the concerned authorities at this right time 😊

  20. Great proposition to initiate a virtuous cycle . At this transformation era leaders needs to be open for consuming the worthwhile leads . Hope this radiant insight reaches out the authority for the benefit of all.

  21. Interesting read uncle. Well illustrated the current situation 👌 Hope this can be done at some point for sure👍 Thank you for investing your valuable time on this💐

  22. Very nice article in my view this is one reason people hesitate to start business in India especially in Kerala

  23. Very well articulated.. Government should take this very seriously and convert the prevailing threat on account of the outbreak of COVID into opportunities .. the country will prosper.

    While some ministries are busy with handling the COVID crisis , other minstries concerned with trade and commerce , industries, , employment etc etc should burn the midnight oil to work on simple policies and procedures and come out with simple, paperless , time bound approval process. Making available ready to use land to them with necessary infrastructure will be important.

    A single window clearance system preferably by the central government for obtaining all necesary approvals which shall, where required , coorodnate with the respective state governments for clearances. But it has to be time bound and should not take more than 3 weeks

    Bureaucracy has to be made accountable and as in private sector , they should be given targets and their performance evaluated on the achievement index. Unless we bring accountability and performance evaluation, there will not be any pressure on bureaucracy.

    A relevant , timely article that gives implementable suggestions. if Vietnam can do, India can do with much more because it is not only blessed with young ,educated, hardworking and dedicated resources but is also known for its fairness and ethics in doing business.

  24. The pain of starting / sustaining a business in India. Where bureaucracy runs wild is when the officials responsible for certification hold you hostage for many days for moving the papers. Most approval / documenting process should be online and traceable. Manual lead-times for processing are unacceptable in this day and age. That’s quite a wishlist of changes to happen in one’s lifetime. 🤞.

  25. A good write-up on an approach to a new and changed Industrial India. Especially the points on PSUs. Thing is that our approach as a government/Country run by traditional bureaucrats may seem to be a problem at every level in getting such a setup. Such a move may require the ones with money & power to lobby and level with the government, whoever in power. Also, all or most arms of the government should work in unison and not rely on singular or selective Industries/market(s) for revenue. Because, laws are aligned in such a way that change isn’t gonna be easy. Also, countries like Vietnam maybe have a stronger will to move past countries like ours and reason why they seem to be working towards their goal. Hope ideations like these reach the right people. To implement change in our system is difficult and need support, voice to make it possible.
    Regards,
    Amogh

  26. Thoughtful and rightly poised article, which our Government should implement at ease enabling grooming of MSME sector, specifically which have created umpteen job opportunities and are effectively contributing to our country’s GDP. As rightly mentioned by the author of this article Mr. Nandaa Kumar, so called developed nations are contemplating to shift their business base from China to our Country, preferred amongst other APAC countries as we have right human talent and competency, with other obvious strategic and geographical advantages.

    I wish and urge our Government to take note of such expert Noteworthy advices / suggestions and do act upon timely to grab this situational opportunities.

  27. It’s interesting read!

    Additionally focus should be shifted from developed / Tier -1 cities to tier 2 and 3 cities. This gives the opportunity to develop locally not only through employment but indirectly encourage other small business.

    Also as you said, when it comes to approvals and clearances, we have many considerations and complications which tores the shoes and looses the intrest in the investor. Instead the clearances should be through a single window.

    Also here investing in SEZ and other economic zones is still no cake walk. Many times it takes additional process than in regular path.
    The concept of social insurance and contract labour should be introduced in India too which reduces the risks on the investor like issues of unions of labourers, wages etc.
    All this key issues if addressed on priority will with no doubt make India a leading industrial hub to the World.

  28. Very valuable article written by Mr. Arunachalam Nandaakumar. At present trend shows entire world is looking towards India for investment destination. India is having skilled young manpower,but no opportunities. The government should consider and implement the suggestions mentioned in this article to enable to attract FDI,boost the econmy,make in India and fullfil the dreams of young manpower.

  29. Well written. Implementing will be a task. Opening up Assembly plants for various European Digital Computer aided Medical Devices will great opening. Fantastic Article. Looking forward for more inputs.

  30. Very nice article, the need of hour, has to be marketed immediately to attract investment.Thiere may be issues on the idea of contractual employment!!

  31. Very Nice article by the Author where in he has lucidly explained his views and given ideas to attract units which are opting to migrate from China. Government of India need to act swiftly on this issue by putting in use available infrastructure and resources.

  32. Excellent Article.

    This Artcle should be forward in PM Twitter account to make changes in fdi approach.

    India is trying achieve this , but a lot of hurdles in every stage. Each state has it’s own policies and it’s keep changing as an when govt changes.

    Some uniform central policy with definite policy period have to be implemented.

  33. Very nice article at the right moment; But at the same time the health of PSU’s in India is also a cause of concern; May be government needs a single independent authorised committee or board to look onto the FDI.

    • Dear Naandkumar sir,

      Very excellent article regarding FDI and we must take up this immediately with Finance miniter as well as Foreign minister and we must take this opportunity and increase our FDI investment and increase the manufacturing capacity overall in india ..

      This is an excellent approch you have put forth and we to convince our cabinate to take decision in this regard and india must grab this opportunity ..

      Great sir ..

      Regards ,

  34. Excellent article sir. Its about time our Indian government implements such strategies for betterment of our country’s economy. Especially targeting SME/MSME sectors with rich manpower readily available. Your words are soo generous and thoughtful. Lets make it reach where it has to sir.

  35. An excellent article, that showcase issues in India vis s vis that of Vietnam.

    India cannot become a giant in manufacturing sector until the laws are changed to bring in investment. It’s bit difficult to absorb the truth by Mr Venkat who has commented on Mittal as well as China, who did make it big.

    Even Mr Sreeram comments are very observing, specifically point 5 & 6

    Yes this government is trying its best, but they are not hitting hitting hard, the law ministry has flunked, the commerce & railway’s action in apr’20 in Punjab is commendable, few MP’s are doing great work.

    One article that appeared in FB sometime back stated that you investors are ready, but redtapeisim/breaucracy spends them back reeling,

  36. A much need article like this to wave the Indian economy and especially to all the fresh and established entrepreuners. Now the situation is totally likewise we have gone back two years in terms of everything, this article will definitely boost and motivate the businessmen to handle the situations very wisely. Hats off Mr. Nandhakumar uncle😊

  37. Very good article Nandakumar. Greatly appreciate that you have taken the time and effort to think through this idea as a patriotic pro-business professional. As you say, the Ordinance needs to push through and steam roll all bureaucratic hurdles and local political issues to ensure success. Another idea is to identify certain sectors and industries and invite them to move their facilities to India. And for that too, we need a centralised strategic approach. Thank you.

  38. A very informative article suggesting ways in which we can jump start the economy post COVID-19. It will be great if we can implement some of the ideas presented.

    • Good evening.
      Congratulations for your good article for prosperity.
      Read and the suggestions by you no doubt lead to industrial prosperity. Some suggestions very minute with regard to labour exists in our country. But. Change from top to bottom is truly impossible due to the following
      1. Political intervene.
      2. BUREUCASY. HEAVY POISON
      3. FINANCE NEGLIGENCE FROM BNK
      4. LICENSES FROM NUMEROUS
      GOVT DEPT. Almost 10
      5. LAND certificate from mining.
      6. NOC within 6 kms from 4 sides
      Of land.
      7. Statutories
      PF
      ESIC and others including labour
      Welfare fund board.
      8. Knowledge not aware and
      Difficulty in the above proceedings.
      The implementations of your suggestions will no doubt help in arising of industries in all sectors specially small scale in various sectors : BACKBONE of our industrial and economic growth.
      I wish the suggestions of Mr. nandakumar are implemented.
      Regards

  39. I would like to congratulate Mr A Nanda Kumar for writing this article which is an eye opener for India and if this is implemented in India this will provide employment and develop Indian economy I am living in Hochiminhcity Vietnam for past 32 years and appreciate Vietnam by making Industrial parks which is easy for the investor to invest Today Samsung invested in Vietnam for past 10 years many others we can see like Intel ,electronics.

    Indian Government should open up for such investment to come in.

  40. Nice article.The ease to start the business is absolutely necessary for quick inflow. Also incentives from government to encourage investments. Would be better if they spread the investment across the country instead of few pockets

  41. Very nice article. Easying the conditions for setting up new businesses and promoting FDI is the need of the hour. The article touches many relevant and important steps the government could take. The government should consider the inputs from the experienced and successful businessmen, such as the author of the article. They need to take steps especially to reduce bureaucracy as pointed out in the article. They need to be more open and adaptive to accept inputs which may help revive the economy and help take advantage of the current situation to encourage the migration of industries.

  42. Marvelous concept. Need of the hour. Just a do-it-yourself project. Simply any state or Central govt can initiate. one restriction should be issued so that cheap labour, Power, facilities and subsidies should not be encashed by FDI for their own benefit to siphon off. May be the author shall have a solution for this also. Timing of this article is appropriate. It’s awakening call for the policy makers. WAKE UP…..

  43. Good article with excellent insight into the way forward. The speed is the need of the hour to attract such flight of industries from China. Creating industrial park of 1000 acres takes time and typically in India to acquire land and create an industrial park takes about 2 to 5 years. Hence the existing unused excess land has to be identified. Companies with in any industrial park which have no operation for more than 1 year need to be identified and that land can be allotted to multiple investors. The next issue is the Labour policy. With every political party having its own agenda it is difficult to have Freedom to Hire and Fire policy. The government should have short term, medium term and long term industrial policy to attract FDI as well as to meet the immediate demand and inflight of capital.

  44. The author’s views are succinct and his commitment to contribute to our country is evident by this article. The GOI and the concerned departments shouldn’t be hesitant and consider his progressive views, customize accordingly and implement to entice new FDI’s into our country which benefits our people and it’s economy as well.

    With a humongous workforce it is highly likely for our country to promote and execute “Make here to export anywhere” scheme.

  45. Great article at right time 👏
    Hope government should be planning on this for better and prosperous India .

  46. This is an opportunity for India to lose. Quite clearly our administrative systems are far too archaic and caught in a quagmire of fuzzy, unclear policies, processes are time consuming and filled with sharp practices, managed by people who have interests that are counter-productive, hence far too many controls. The laboured and laborious approach to taking advantage of opportunities allow countries like Vietnam to steal a march by miles.
    The article is well argued. I hope that this is read in the right quarters by decision makers. To borrow a phraseology, It’s not the big countries which will take the opportunities, it will be the fast countries. For India, as the article argues, it’s time to change.

  47. A well written article which briefs out the actions to be taken by the government to improve Indian economy and revive employment in the country.
    It’s the need of the hour and practical steps have to be taken to see a positive change easily and quickly. Hope this reaches to those responsible and they adapt to it quickly .

  48. India has huge potential, to open new vistas in bringing more and more ventures from other countries, especially at a time like this.

    China for example – Entire World look at china for various products right from toys to electronics to food to medicines ! Today, in our own country, nearly 70% of consumer need items can be seen with the label “made in china”.

    This phenomina can have a roundabout turn, if our Indian Government in consultation with state governments, and Prospective investors and Corporates, take appropriate strategies, to woo many of the nanufacturers, investors to India offering attractive benefits. India is abundant in Land , infrastructure, technical expertise, Labour force much cheaper than many other countries including china, and talents.

    I could not open the web pgurus.com for whatever reasons, but perhaps my hereabove post may be in line with the text of your message.

    N R Ayyappan

  49. Now Is the time India should take this big step.

    All points mentioned here are practical and surely deliverable if taken seriously.
    India is hugely talented and identifying 12 such spots all across the country gives equal opportunities to all countrymen.

    This is a perfect guideline!
    Well written and need of the hour to see that the manufacturing industry gets a big leap in our country.

  50. Many points given are to be implemented for doing ease of business by the government so that it opens up the window for making many more investments from other nations into India.
    This would definitely support the growth of our Country.

  51. Excellent article….the idea of making industrial park in PSU is very novel and is an apt solution for speedy implementation.
    👍👍

  52. Its really a nice articles. We should start grab this opportunity and makes new policy’s, lets have one windows for all the approvals.
    We should have new laws for all this Projects.
    So no MP or Union will interfere in that business and all should be handle by Central Government.
    Every businessmen will feel good atmosphere to run it profitably if no hassle will be their so they can concentrate to grab more opportunity to get orders world wide.
    The government should use the rivers for the mode of transportation, so it makes the cost of products will be very less.
    We should make nominal income taxes for all food stalls to pay yearly atleast 500 rs to 1000rs ,they can pay quarterly basis also through there Adhar Cards.
    We should have income Tax account number,so any person can go and pay the tax and his Adhar card will be his number for tax department to identify it.
    So any one will feel comfortable to pay and not go through CA and all the payments he can make in any banks also.
    We should encourage all the Small stalls seller to do tax payments and make every States get income also.
    If we join hands and forget discrimination so we can make it possible to be the Best Business Hub in the worlds.

  53. The article has come out very well with all aspects of industry to boost. Many PSU have funds and land bank to support this. It is the right time to take up this one step forward to implement in present scenario .the government should such ideas and support entrepreneurs to take part . Government should minimise the paperwork for approvals in fast track basis under single window . The government should encourage the author and avail the services from his experience and experty

  54. Great vison in testing times, much needed article and some great ideas wrt companies in debt and lagging cases in NCLT , hope these can get implemented some day.

  55. What else needs to be said. The less said the better. And that’s the situation today.. Perfectly explained Mr.Nandakumar

  56. Very practical solutions. Ground level realities, well articulated. The issue is we have to strengthen our institutions. There is a belief that FDI looks for great returns, which is the later part. First, the investor is concerned about safety of their capital after adjusting for inflation and currency variations. We have not been able to provide that comfort of capital safety. I am working with a Japanese FDI for my affordable housing project, I tell them it takes 9 months for me to see the first incoming cash flow, they just can’t understand the approvals take that long. Just calculate the cost of investment for that 9 months! How can we be even remotely competing with countries like Vietnam. I am not an economist. I can takes guess, almost 80 percent of the FDI outside technology has come into buy the safest yielding assets. Nobody wants to put money on basic infrastructure and development, because we are that risky. I don’t know the exact number, but I do know that we are at the bottom of the list for ease of doing business. As articulated
    by our good friend Nandaa Kumar, unless we sort out the basic issues no money will come to towards development. If there is no FDI for development works, there is no job generation, hence Anaemic economy.
    Let us not dream that, India is a sacred place and money will flow and not behave in such a manner that, they will come without cleaning up our house. It would amount to arrogance

  57. Well researched and timely article. The ideas explained here are definitely workable, provided all the stakeholders think alike. Perhaps the easiest job is to give approval for FDI. The real trouble starts thereafter. For example involving PSUs. These PSUs come under different central ministry and the coordination between them is well known. For every minor issue it’s only PMO which can sort out the issue as the individual minister or ministry headed by IAS Babu’s don’t have the wherewithal to run the administration effectively. Let’s take example of PSUs promoting technology parks. Experiments were done in the past and ancillary services units were promoted to assist MSME. Similarly nationalised banks promoted RRBs etc. Today it’s not worth remembering the time and money wasted on that. This doesn’t mean we should take a pessimistic view of the idea itself. It’s definitely workable and badly needed in the interest of our country. Opportunities don’t come knocking door every now and then. I am of the opinion that post ordinance, a separate authority with more teeth than the regulatory authorities we have now reporting only to Prime Minister. It should be some what like recently constituted CDC. If hungry masses are to fed in comming days, perhaps this is a wonderful opportunity and suggestion.

  58. Hello sir
    This is right Opportunity to bring them to our land. Need to create a Bench with Expertise to Address all the Challenges and give approvals in single Window .

  59. Dear Sir
    Thanks for investing your esteem time and giving us insight about how current movment could have been INDIA and take immense advantage. The goverment always having lethargic & artificial approach towards FDI from past so many years. India has become most comprehensive talent pool from past several years. India could have steal the oppourtunity while attract industries to setup. We got only 3 out of 56 Industries which been migrated from China so its not even its just merely 3%. Where we are facing the problem of unemployment and youth seeking the jobs to we are still in planning stage and to be honest I have not come across any concrete plan. I beleive we have already lost the time nothing was bigger compare to this
    oppourtunity.

    Onus on elected people to preapre roadmap however nothing been done as a result bag only 3 industries in our kitty that exhibit it self our approach towards make in india.

    I appreciate your time and energy to gve us true insight about Indian industries & I can understand how frustrated you are as being in industry for more than four decade.

  60. Good article. Request auther to spell out the gaps with respect to our current policies. Since this is unexpected opportunity we need to quickly amend our policies to make most of it. There are good suggestions by author in this regard.

  61. Mr .Nandakumar has made true revelations and this writeup is out of his own experience which our Govt should consider with utmost priority as the timing is very just and right.This Writeup can prove an excellent background home work for making further plans based on such good suggestions.

  62. Mr A Nandakumar, with his vast and varied experience in Vietnam has written this article which, should be implemented immediately for attracting much needed FDI for generating more employment in India. The suggestions given by the author are all practical and can be implemented. The ordinance should be the right route now due to lockdown. The present government with a massive mandate should convince the states and the political opponents for quick implementation of the suggestion. We may miss the opportunity if we delay.

  63. Suberb Article Sir,
    You have clearly high lighted the obstacles facing in India because of old FDI policies.
    Apart from PM Modi, even other good politicians in BJP must support in this matter and take the mentioned suggestions in the article and implement where ever possible.
    Governments must recognize and adopt these kind of regulations
    Hats of to you
    Mr.Nandakumar

  64. Excellent Article done by Nandakumar. It’s plausible suggestions provided to Indian government. If this gets implemented, India could gain the momentum in terms of manufacturing hub. We have been poineering in service sector post Global Financial Crisis. Now after Covid-19 crisis, we would be top on the manufacturing as well. This is really a need of an hour thought.

  65. Excellent article. Clearly articulates the specific differences between the FDI policy of India and Vietnam. I have seen with my own eyes how Vietnam has transformed in the last 25 years. I hope this article reaches a wide audience especially within the government.

  66. loved reading and hope this reaches to right ministry so that timely action can be taken.

    government needs to take recommendation from seasoned entrepreneurs and Covid 19 is an opportunity that india cannot afford to miss from economic perspective.

  67. A very thoughtful brilliant idea explained detailedly, if put to use can help boost the manufacturing sector greatly thereby creating enough jobs and also helping the “make in India initiative”. The government should consider and try to implement this brilliant yet simple idea as soon as possible to make good use of the present global opportunity. A more proactive approach is the need of the hour by the Indian government and as the author shares from his experience the ease of doing business and least bureaucratic red-tape is what attracts FDI’s and creates a business friendly environment.

    If the authors ideas which come from his vast experiences of doing business in other countries are implemented I can surely say we can attract a large number of FDI’s into the country since we are blessed with skilled manpower and a large number of youth compared to other countries which cannot be overlooked.

  68. The article is very apt to what is required in this hour for India to increase its manufacturing. The govt of india should look into these suggestions and try implementing. Lot of small startup’s in India who outsource their manufacturing to China would also start looking at setting up their own manufacturing post COVID if the policies are less bureaucratic and investor friendly. Hope the current Govt. reads this article.

  69. ..Governments should recognise and adopt these kind of regulations. If Vietnam a communist country can get so many Foreign direct Investments we as a democratic nation with high literacy & capable skilled manpower. We Are way capable

  70. I have read your insightful article and I am in agreement with your views. I have been travelling to Vietnam since 2001 and I have seen the progress it has made, due to their FDI policies. Certainly if India adopts this strategy it will be beneficial. Especially if these zones are near the ports, it will make exports easier for international companies. G.D Agarwal (Chairman, Shrijee Group)

  71. Very interesting and hope one day our country can change its current SOP to an one that is more promising and which inclines towards incremental development.

  72. I am very much excited while going through the article. No body understands Vietnamese Government procedures and practices better than Nandaa Kumar sir. I am fortunate to work under his leadership for a long time in NIVL group.
    The suggestions given in the article are very much valuable and must be implemented immediately by the Indian Government to catch up the Foreign Investments in this present global situations. All the suggestions must be implemented as they are mentioned. I fully agree with the views of Mr. Nandaa Kumar sir.

  73. Irrespective of COVID or the current trend of companies migrating out of China, we have to make India an attractive destination for new-age manufacturing (just like we did for call centers, s/w onshoring etc through STPI). NK’s article has valuable suggestions (and a well laid-out plan) which will go a long way in fulfilling this goal for India. About time we got started on implementation instead of talking and discussing.

  74. Mr.Arunachalam Nandaakumar has written this article at the right time which clearly brings out the need to implement ease of doing business and attract FDI. Thanks Mr.Nandaakumar for this insightful article

  75. Excellent write up and Mr Nandaa Kumar has brought out the facts lucidly. This is nothing but a blueprint to the Govt of India to implement the same. This should be sent to Nirmala Sitharaman and Piyush Goyal immediately.

  76. In this current situation, India has already proved to the world that nothing can shake us and also our government with its actions to the current pandemic proves that even if there is a economic impact the main aim is to save the people and priceless manpower which is the back bone of our country!.. With this suggestion by you sir government should consider and reduces the hassles to start a business and help the unemployed to earn a decent living!.

    Very nice article sir which you have published in the perfect time!!.. and I really love the words “ India must exploit the situation “ by doing so we will emphasise to the world that nothing can stop our continuous betterment!…

  77. Hi sir
    Very aptly suggested , Currently in India Land , Labour unions, and exit policies are the biggest challenges which government has to address on emergency basis to attract FDI.
    Many suggestions made are an absolute necessary.
    Govt has to think out of the box and has to act fast or else we loose the rare opportunity.

  78. A very well written article. An opportunity is there for the grabbing and I concur with the idea setting up of a new Industrial Policy which has a hazzle free approval process.

    In my view, India must revive it’s land, labour, capital and judicial reforms in order to attract investments.

    Incentives are not the key driver for foreign investments in establishing green field projects in India, which has been evident with the little success of highly incentivised policies such as NEIDS, and state industrial policies of Gujarat, and Maharashtra.

    Incentives in the form of Tax Holidays, etc are grabbed only by the cost plus IT service companies who restructure their export operations to such EOU’s.

    In my view, China has been successful in driving Investment in manufacturing primarily because of its effective supply chain.

    All the inputs for any manufacturing sector will be available in a 300 mile radius, making cost of production to be most effective.

    In India the value we pay for a product, has significant portion of transactional cost, whereas in China despite labour costs being 3X more than India, we pay more for the transformative value of the product and little so for the overhead cost.

    So a cluster based sector specific industrial parks could be the niche that India could market itself. For instance a park which is dedicated for the automobile sector, will have only auto and auto ancillary manufacturers.

    These cluster parks could be strategically placed either closer to its raw material source or close to the port in order to be competitive in the export market.

    Indians are natural traders and not innovators and therefore an incentive for investment in R&D should be reintroduced.

    Indian PSU’s are poorly managed and highly leveraged. Therefore the PPP model could be modified with the State directly making equity investments in these projects, and where the state plays a monitoring role than a managerial role.

    Approvals and Licenses should be on a self-certification model. The issue with Indian bureaucrats is that they have a notion that the person sitting on the other side of the table has the same state of crooked mind as he does. To avoid this notion, stricter punishments for violating could be implemented ensuring that the self certification has been complied with.

    • Thanks for a very insightful article. I think the proposed Industrial Parks under PSUs is an ingenious idea and provides a fast and a great starting point to attract FDI in the present scenario.

  79. Indian businessmen cannot survive without crony capitalism support for they survived – bottlefed by govt, so their brains, their minds, is will, no energy, enjoy beach parties, beach shows with actresses, enjoy fast life, get drunk & fall asleep on any available surface then.
    To expect any innovation or investments from these rotten businessmen is a day dreaming of highest order.

  80. None of the Indian chief minister or any MP or MLC has any skills to attract industries without talking of seeking tax concessions from Central Govt. It is surprising the media & BJP Bhakts talking of industry flight from China to India, without doing any home work – which industry, what are its needs & wants, which place would be ideal for it in India, how to plan for that industry, with no industry belt planned, no infrastructure i.e. electricity, road, water, housing, how are they end up of industry shifting ?
    So many software companies, none have any equivalent of Indian version of Whatsapp or Facebook or Twitter or Zoom, language translators
    Foolish Indians upload videos on YouTube, why India cannot have its own YouTube ?
    Foolish Doordarshan is using Zoom to telecast Sri Shankara Jayanti when Govt said do not use it for it has security flaws (i.e. Chinese origin), yet they have no alternatives.
    A tiny country Singapore is the marine hub in South East Asia, why India with long coastline (east & west) , cannot grab that business ?
    BJP Govt is total failure for the only working ministry is Prime Minister office, rest all sleeping. Why BJP does not take professional to substitute its rotten ministers to do a good job & take credits.
    In Mahabharat Pandavas relied on ONE Abhimanyu to delivery on key day, he died, is BJP taking the same route by hiding behind Prime Minister ?

  81. I read Mr. Nandaa Kumar’s excellent article and found it very relevant and timely. I feel the Government of India should give it serious thought and go ahead and implement the suggestions for its own and the country’s good!

  82. Very Nice Article.
    I worked in Vietnam under leadership of the Author and his ideas will always be innovative and always look for welfare of the Society in turn serving through Industry.
    I wish under his leadership much more Units are to be established Globally

  83. Very practical in approach. Well thought out. Am sending this to my area MP who is a cabinet minister. Does the Govt care – I don’t know.

  84. The SEZ, FTZ sort of forays are the half-hearted manifestations of the same hue. Sans SEZ for IT, both have had unenviable track records so far.

    For one, processes setting up business has to be eased…..both fdi and domestic. Yes, fdi has the added incentive of inward forex. All points boil down to regulatory approvals (prone to ingrained rent-seeking mechanisms) and outdated labor policy. Both have long been identified as factors and spoken of ad nauseum.
    Truth is the lack of will and no accountability for inaction.
    If Vietnam can do it (for all the spite communism takes) and India cannot, it boils down to just that.
    About time the powers stop chest-beating, back-patting, playing blame-games and start acting – simple steps like what the author suggests can work.

  85. What a wonderful set of ideas! The canvas has been more than 90% painted by Mr Nandaakumar – if the Govt would just implement as it is, it would give great impetus to job growth as well as recovering from the economic slowdown.

    • Let us analyse the ground realities. Even if central government gives all the permissions, hurdles will come at implementation stage . Most of the infra facilities have to be provided by states and most states have passed laws to recruit 75% labour locally. Local political leaders, surrounding the industries can cause havoc if mamools are not paid. Ex Sterlite was hounded out of Tuticorin by political goons. Even Mittal, the steel magnate fled leaving 50,000 car investment project. For ex if few tribals / or burqa clad women, sit in front of factory and agitate, who will solve the issue ? Modi, or local police .

      At present logistics for shipment from factory to vessel is laborious with multiple documents and so are imports.This requires massive transformation at ground level.China being ruled by guns, the work culture is vastly different from ours. Even in India work culture varies from state to state.

      To bring Chinese type working mechanism, multiple laws have to be changed with taunts from political parties. Why to wait for China based industries, even Indian businesses want such working ambience. The worst draw back India has is unreliable workforce, which perhaps will change in future.

  86. I think it is an excellent idea and suggestion , very practical , easy to implement and will really take Indian businesses to next level . Govt must implement it , will really take us towards becoming a manufacturing hub, solve our labour issues , and will develop a new culture .

  87. Nice article. Whatever author has said is correct and rightly illustrated . I was in Vietnam as Country Manager, ONGC Videsh. This is the oppurtunty we have, We need to have ready to move infrastructure like VSIP. We need to work differently now,. Power and responsibility ( both together) need to be given to local technical expert, preferably devoted retired technical officer from PSU, than regular conventional bureaucracy. Otherwise industries will move to Vietnam or even Cambodia rather than India.

  88. Very helpful article ..Governments should recognise and adopt those kind of regulations. As mentioned Vietnam a communist country can get so many Foreign direct Investments we democratic nation with high literacy & capable skilled manpower can easily catch the eyes of the world .

  89. 👌🏻wonderful rational thinking , governments should listen to this sort thinkers ( Arunachalam Nandakumar )now to bounce back the economy

  90. India has plenty, but equally bottlenecks are plenty. Perhaps India is the only country where wealth creators are demonised and wealth gobblers are controlling power. They are politicians, beurocrats, media mughals and judicial system. If people with professional background were in power, and respecting merit, india is as good as US.

    What the author is suggesting is SEZ to be controlled by PSUs instead of Govnt. Railways, IOC , NHAI which are pan India can take up the task. In fact Railways have their own surplus land. Not only industries returning from China, even Indian entrepreneurs, badly require a system to create wealth. Any industrial cluster should have power, sewerage and feeder roads. Like a gated community, they should have amenities, and accommodation to workers and supervisory staff.

    Provision has to be made for in-house ancillary industries. Labour and commercial disputes to be resorted by a commission and not by existing Indian laws. There should be zero interference by state govnts. In fact India can open a separate industrial/ commercial conclave similar to Hongkong / Singapore with self governance, tax haven bank and a leisurely haven like Bangkok. East coast of India is best place. Pl note every western company insists on vacation to employees.

  91. This article has captured the essence of what is ailing in the Indian business sector. Ease of doing business has not been really easy. As the author says, the focus must be to have a faster turn around from the government, lesser paperwork and more pragmatic approach. In fact all filing should only be for statistical purposes and not for any approvals. The government must involve businessmen like the author who have international experience of setting up businesses to bring in best practices. If India has to divert business from China a more proactive approach is necessary.

  92. Citizens have many ideas, but govt has none, bureaucracy kills everything. Did not see during this lockdown
    1) No information on ground
    2) No face of bureaucrat is seen behind disucssions/decisions
    3) Too many policy flip flops
    4) Cannot put or make a single website with information to migrants or no data on migrants, no helpline number, non-functional state govt, total failure on all fronts
    5) Why media is not reporting each state deficit & how many years each state needs to reduce deficit
    6) Why media or BJP govt is keeping silent on state freebies & how it hurts or already hut the states / India in general.
    7) Citizens are just fed-up Khangress or BJP both are on same page. NOT worthy minister in entire govt. All puppets & roadside speakers.

    • Super article. Very relevant in current times. It not only addresses the problems of starting / doing business in India, but also brings out pointed solutions. This is the only way to keep the entrepreneurial spirit up in India, otherwise tomorrow there will be no jobs left for majority of the population.

      • India Government have to take positive action on FDI and encash the right opprotunity at this situation and boycott all Communist country’s

        Great Article written by Mr Nandaa Kumar

  93. 👍 Need of the hour.
    From Rigidity to Easiness. 👌
    Brilliant work out. 💐
    Still some more small things has to be included.

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