Economy

Chinese small enterprises see manufacturing potential in India

V Rishi Kumar Hyderabad | Updated on January 16, 2018 Published on October 07, 2016

India has a great potential for collaboration with Chinese companies and small and medium enterprises need policy support.

Keen to explore setting up facilities, capitalise on lower labour costs

A number of Chinese small and medium enterprises are keen to set up manufacturing bases in India and Bangladesh to take advantage of the lower labour costs, said a senior Hong Kong Trade Development Council official.

Dickson Ho, Principal Economist (Asian and Emerging Markets), Research Department, Hong Kong Trade development Council, said about 6,000 SMEs from Guangdong province have,on their own or through local engagements, set up units in Vietnam.

“We are now exploring opportunities in India, which has emerged as an attractive investment destination due to the lower cost of labour compared with China. As part of a pilot research we have visited West Bengal, Assam, Odisha and Hyderabad (Telangana) to explore opportunities,” he said.

Dickson Ho said businesses in textiles and garments, furniture, plastics, machinery, household items, and electronics are keen to explore setting up facilities in India.

Apart from taking advantage of lower labour costs, they can market their products domestically and export to other markets.

“We are particularly keen to engage with SMEs as as they need linkages unlike big companies like Alibaba, Foxconn etc, who can find their way anywhere,” he said.

If the production data of textiles are any indicator, India has a great potential for collaboration with Chinese companies. China accounts for nearly 10 times the textile business generated in India, he said.

There are a number of original equipment suppliers, which do not have their own brands.

They can work closely with local tie-ups, he said.

Published on October 07, 2016
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