A survey conducted by the Confederation of Indian Industry and professional service firm Evalueserve has revealed that most Indian companies were still willing to increase their investments in China despite the ongoing trade turmoil.
The survey included around 57 major Indian companies across various industries.
The Indian companies that were included in the survey all had active operations in China. Most of the companies had cited an increase in their revenues and profits over the past years as the main reason for their decision to continue investing in China.
When asked about their take on the ongoing trade dispute between China and the United States, the majority of Indian companies mentioned that they were not daunted nor affected by the trade tensions.
Indian corporate investments in China typically range from $70,000 to $70 million, with annual revenues ranging from $80,000 to $80 million. The industries that are typically outsourced or established in China by Indian corporations include those in manufacturing, consumer products, services, IT, BPO, logistics, financial services, chemicals, and telecommunications.
According to the director-general of the Confederation of Indian Industry, Chanrajit Banerjee, Indian companies still remain to be "cautiously optimistic" in their Chinese investments and they remain confident in the returns.
Around 30 percent of the Indian companies that were included in the survey reported revenues higher than $14 million from their Chinese operations last year. Four out of every five companies reported that their revenues had increased in 2018 when compared to revenues generated in the year prior. The main reason given for the increased revenue was an increase in the overall quality of their products and services from China.
The most common methods used by Indian companies for expanding in China include establishing branch offices, subsidiaries, forming joint venture companies, or establishing wholly-owned foreign enterprises. Indian companies with operations in China typically source half of their workforce locally. Some companies mentioned in the survey that they are slightly concerned about the country's rising wages and skill shortages.
The survey revealed that most Indian companies preferred to establish their businesses in East China, particularly in Shanghai. Indian companies are also starting to look at Beijing, Jiangsu, and Guangdong as possible destinations for future investments.
China is well aware of the increase in Indian investment to the country, which is why it had continually been trying to further open its economy to its close neighbor. Analysts predict that the deep economic relations between both nations will still continue to grow in the coming years.
Both nations will, of course, have to jointly face the current issued that hamper trade. This includes trade bullying and commercial hurdles such as irresponsible trade policies and unilateralism.
