India must adopt an “aggressive approach” to attract multinational corporations to set up and expand their bases in the country, a top Indian-American business advocacy group has said, observing the ongoing Russia-Ukraine war is leading to a tectonic shift in global trade.
“I think India has to play a much more aggressive approach to these corporations. Having a direct dialogue with these corporations and tells them: ‘what do you need’, ‘what can be done for you to come invest in India?’” Mukesh Aghi, president, US-India Strategic and Partnership Forum (USISPF) told PTI in an interview.
Every corporation has a unique requirement, he said.
“Yes, you can’t change the law. But you can define a broad-based policy, which makes it attractive for a lot of these companies to come into India. That’s where India has to reach out to these companies, understand the requirements and then put in place a set of policies which become uniform,” he said.
Aghi said there have been some efforts but those are more of a transactional effort rather than a uniform or a cohesive approach on this.
Aghi said at some point of time India will need to think about its relationship with Russia.
He pointed out when US President Joe Biden was meeting Prime Minister Narendra Modi in Tokyo as part of the Quad summit this week, the Russian and Chinese governments were flying long-range bombers over the Sea of Japan.
“The message was very clear from Russia, that its partner, and his allegiance lies with China and the Indo-Pacific region, rather than India. And to me, it was very stark, that while the Prime Minister of India is there, you have Russian bombers threatening or taking a threatening posture along with the Chinese. To me that’s a very clear message that India has to start thinking about its position with Russia,” he said.
In response to the over two-month-long Russia-Ukraine war, India has called for respect of territorial integrity of nations and the United Nations Charter.
However, New Delhi has not condemned Russia directly.
“The question really becomes: at what stage India will come out and condemn it. I think India as an emerging power has to start taking some positions, which may upset other nations, but that’s the nature of the beast when you are becoming a leading power,” Aghi said.
One thing that has come out clearly from the Ukraine war is that Russian equipment has not performed well, he said.
“Russian Defense Forces and the equipment have been destroyed substantially. Russia’s economic embargo means chips and semiconductors are not moving into Russia. So, Russia will have difficulty providing spare parts not only for his own armed forces, but for countries like India, he said.
“So India has to seriously start thinking what are the alternatives. At the end of the day, India’s biggest challenge is China, not Russia. And we’ve had in the last two years, physical invasion and killing by Chinese and Indian soldiers. That’s where the bigger enemy lies. India has to look at its supply side; this defense strategy from that perspective – as Russia gets weaker both from a supply chain perspective and also as a military problem? Aghi said.
According to Aghi, the Russian invasion of Ukraine has changed in some way the global order, especially the balance of power. We are seeing tectonic shifts taking place, he said.
“Corporate America got weaponised by having to pull out of Russia overnight, and that was not a diktat from the US government. It was a consumer sentiment which drove that decision making. There’s a tremendous amount of empathy for Ukraine and that influences boardroom thinking about being or not to be within Russia and the majority of the companies have pulled out of Russia, he said.
Now the question you have is among the boardroom discussion taking place is what happens if China invades Taiwan then what happens to our investments in China? More important is what is our backup strategy? Yes, you can bring back a lot of stuff manufacturing to the United States, but a lot of them won’t come in because of lack of resources, lack of manpower, he said.
And that’s where India becomes a critical player, both from a market perspective and also from a manufacturing perspective. I think that’s where you need to leverage all of India’s attractive market for these companies to come in and start having a China response strategy as things move forward, Aghi said.