The recent border conflict between India and China in mid-June, which resulted in the death of twenty Indian soldiers, has also upset Indian people, making them hesitant to use Chinese goods and services, leading them to pursue alternative market and trade avenues.
The result was an angry public demanding a moratorium on apps and even a boycott of the goods created there. This has brought more emphasis to Indian manufacturers who have had to struggle for attention in their very own market in the presence of foreign counterparts, particularly cheaper products from China.
With India evolving as a top contender in attracting foreign investment in the manufacturing and industry sectors, our government has renewed emphasis on Indian manufacturing and its Make in India program has gained more momentum, potentially fostering India ‘s vision of being Asia’s next superpower.
Given this, mergers and acquisitions (M&A) deemed an important method for harnessing advanced technological know-how is the perfect way out for both Indian and foreign firms seeking to align with the policies of the Indian government and encourage local manufacturing, while at the same time embracing and maintaining global best practices in manufacturing and trading.
Moreover, FDI in India is showing a long-term growth pattern and the wide Indian economy, combined with strong post-pandemic economic growth, will continue to draw foreign investment. FDI in India is showing a long-term growth pattern and the wide Indian economy, combined with strong post-pandemic economic growth, will continue to draw foreign investment.
In its World Investment Report 2020, the United Nations Conference on Trade and Development (UNCTAD) reported that India was the 9th largest FDI recipient in 2019, and the largest FDI host in South Asia.
The recently introduced Aatmanirbhar Bharat Abhiyaan has been like a refreshing change for Indian manufacturers. Increasing government borrowing limits, privatizing Public Sector Enterprise (PSEs), collateral-free business loans, MSME corpus, and subordinated debt, disallowing foreign corporate governors up to Rs 200 crore, and lowering tax rates serve as the main policy emphasis.
Indian companies need to take full advantage of the schemes and initiatives of the government and negotiate M&A deals that allow them to maintain their freedom. Enhancing collaboration and teamwork in various operational areas such as marketing, finance, production, and so forth is the best way forward for businesses in these difficult times.
Taking advantage of the increased interest in the Indian market amid the current economic crisis is imperative for Indian business leaders to return stronger, better and leaner. Indian companies will create a stronger footprint in the global market and boost India’s position as a leading manufacturing nation by successful preparation and execution of the M&A process.
