Kathmandu. Indian Prime Minister Narendra Modi has expressed that India will be a manufacturing hub in its own capacity in the post-COVID-19 world order. Previously, there had been widely covered news of how US companies were leaving China and relocating in India. The reality however is far from the expected, as only three of the 56 companies that moved out of China entered India as of October 2019, 26 relocated to Vietnam, 11 went to Taiwan, and 8 to Thailand.

Analysts have juxtaposed several reasons why PM Modi’s anticipation of China based companies did not make their way into India. Modi believed the “3D’s” – “democracy”, “demography,” and “demand” would attract investors. However, that did not happen.

The Economic Times reports, “Attracting manufacturing investments will require, first and foremost, that governments in the region acknowledge the competition is passing them by. India, for example, must abandon its overconfidence that investors will come simply for its large population.”

Amongst the several reasons why companies would not move to India, could be the lengthy process of company registration along with its legal formalities. Acquisition of basic amenities like land, water and electricity required for production, are not as easily available as in other countries. Weaker infrastructure coupled with a rather unstable political backdrop also adds to the repellent. Dissolving a company or leaving the country, a crucial leeway, is practically one of the biggest barriers in companies starting out in the first place.

Currency volatility is yet another factor that companies would avoid. The numeric population does appear promising. The purchasing power of the Indian mass, though, is relatively very low with India’s per capita income at just US $2,104.

The Asia Times quotes, “Businesses look at whether or not they can maximize sales, revenue, profits, and brand value after investing in India. An investment decision is a rational undertaking; there is no room for emotion.” It stresses on why US companies will not resort to India if their businesses do not bear better prospects.