"With the global reliance on Chinese manufacturing bases exposed in light of the global pandemic, many countries are now looking at alternate manufacturing sites to increase their supply chains.
"Given India's minimal labour costs, slowly reducing corporate taxes and relaxed bureaucratic red tape, India can poise itself to become the next manufacturing hub," said Atul Pandey, Partner, Khaitan & Co.
However, in order to roll out the red carpet to global firms and present a credible alternative to China as a manufacturing hub, the Indian government will have to overhaul the state power utilities, put in place a mechanism for enforcing commercial contracts by bringing in specialised commercial courts and establish a consultative mechanism for commercial/foreign exchange related laws, he said.
The government, Pandey added, could also look at other issues like reducing stamp duties and other related costs.
"Covid-19 has brought a unique opportunity for India. The disruption due to restriction of import has given an opportunity to local manufacturing units to fulfill the domestic need which earlier was catered with imported supply," said Daizy Chawla, Managing Partner, Singh & Associates.
"Further, it has also opened a wide opportunity to attract more and more foreign companies, especially those who want to wind up their businesses in China," she added.
The entities that are closing operations in China and are wanting to shift to India will find it easier to start business, thanks to the initiative taken by the Modi government to improve ease of doing business, Chawla said.
"India has the opportunity to emerge as the next global production hub as it can offer a large internal market, quality labour at competitive rates and a thriving private sector. India could further improve its competitiveness by focussing on harmonizing trade and FDI policy," said Mohammad Athar, Partner -Economic Development and Infrastructure, PwC India.
The private sector, he added, can play a vital role in helping the government create an enabling ecosystem to attract investments from abroad.
L Badri Narayanan, Partner, Lakshmikumaran & Sridharan Attorneys opined that India's improved tax regime and reduced rates will be helpful in attracting overseas investments.
"In the recent past, the tax regime in India has been quite dynamic and the government has introduced a range of tax sops in order to attract investment, especially in the manufacturing sector," he added.