Global firms to move from China to India; Modi’s Atmanirbhar Bharat 3.0 package is ‘average’: Survey

Most Indian companies expect a fair share of global manufacturing will shift from China to India. 69 per cent of the respondents in the Ficci-Dhruva Advisors Survey conducted this month, covering more than 150 companies in India, said that they expect the global companies to move out from China to India. On the other hand, a little more than half of the companies said that there is no impact on the finance costs post-implementation of the stimulus package. They also called Prime Minister Narendra Modi’s Atmanirbhar Bharat Package 3.0 as “average”. The package contained incentives for employment generation, the extension of ECLGS till March 2021, guaranteed credit for supporting stressed sectors, the extension of the PLI scheme to new sectors, etc. 

Weak demand, managing costs, the shortfall in financial liquidity are still the key challenges faced by the companies due to the current uncertain economic environment. Post-implementation of the stimulus package, most of the companies said that their finance costs had no impact. However, the number of companies saying that they have adequate credit facilities from banks has increased in December. Also, with local lockdowns, companies said that they are facing a moderate impact on their businesses. 

As far as the travel restrictions are concerned, three-fourth of the companies said that it significantly impacted their ability to undertake business operations efficiently and effectively. However, even as the travel restrictions are over, the companies expect a mix of travel and virtual meetings. They expect that there will be a significant impact on business from the availability of the Covid-19 vaccine. 

35 per cent of the companies believe that their businesses will return to normal growth in 6 months after the availability of the vaccine, followed by 29 per cent who believe that it would take 12 months to return to normalcy. Meanwhile, 62 per cent of the companies also expect a reduction in tax rates in the upcoming Budget 2021.