This assessment proposes a mix of two approaches that the Indian government should adopt in order to attract investments from companies looking to exit China.
The first, a geostrategy-led approach, entails working with like-minded partners, particularly focussing on sectors with national security implications. The second, a case-by-case approach, involves identification of sectors in which India enjoys comparative advantages and adoption of targeted measures to attract foreign investment in them.
We argue that political trust and security concerns are likely to play a far greater role in economic decisions for States and companies in the post-COVID world. Given this, these approaches not only leverage emerging geopolitical trends but also harness India’s comparative strengths in key sectors.
This makes them easier to pursue in the near term, with greater chances of achieving demonstrable success.