India as an Emerging Investment Hotspot in the changing World Order

-By Sonakshi Singh

The pandemic of COVID-19 is a unique and extraordinary situation that the world has been facing for a few months. This disease is widespread over the entire world so much that the World Health Organization (WHO) declared the same as a ‘pandemic’. The word ‘pandemic’ here means that the epidemic is affecting beyond a country’s border i.e. it has spread to various countries altogether. This outbreak has left the entire world in turmoil where people are fighting for their lives and have played havoc with the economy of the greatest nations of the world. It has led to the creation of a lot of hurdles in the progress of the global economy. During this crisis, apart from the medical treatment of the patients, another ongoing global issue is the political stance of the countries. While the United States and China continue their blame game, India has emerged as a friendly State and a preferred destination for investment due to its early response to the pandemic. In this article, the author has analyzed the fall in the global stake of China and how this situation could be capitalized by India, given its geographical and other advantages. This article attempts to throw light upon the prospective global position that India can hold as an emerging investment hotspot during the tough times of Covid-19 and the consequent change in the world order.

The downfall of China’s Global Image:

China was the most favored destination of investors owing to its cheap labor. Every other big company had its manufacturing unit in China. Every other product that one sees in the market is labeled ‘Made in China’. However, this attractiveness of China has completely taken a reverse turn since the origin of the Coronavirus Disease, which has led to a global crisis. China has been facing bad limelight globally due to the alleged origin of COVID-19 there and its non-disclosure by China to the world. China had falsely claimed on 31st December that there was no human-to-human transmission of the coronavirus.

There is wide speculation that the reason for the hiding of important facts related to the disease was to execute the US-China deal first. By enforcing the ‘force-majeure clause’, China will be able to avoid the end of the trade deal. This has created hostility between both the world leaders. Additionally, their negative image has deepened due to the defective PPE kits supplied by China to other nations.[1]China has also been accused of under-reporting its cases and death tolls due to COVID-19. Consequently, global investors are pulling back their investments from China from the fear of an economic backlash and the loss of trust. Approximately, 5 major countries have declared their withdrawal of businesses from China as it has become non-reliable.

Change in World Order:

Globalization and trade have been affected adversely by this crisis. No country in this world has left unscathed from the current Covid-19 crisis. Each country in the world has witnessed a sharp contrast in its political, legal, and financial status. The fact that this pandemic has been going on for almost a year now and no possibility of its end is currently being witnessed has led to a massive change in the world order.

Trade routes will now be judged suspiciously and the foreign investments to exploit global value chains (GVC) in the usual destinations will be hampered. The negative global image of China has presented an opportunity for India, which must capitalize. As a part of QUAD in the Indo-Pacific, India will become important to contest China to post this crisis. [2]

India – An Emerging Investment Hotspot:

India has performed excellently, both at the domestic front and the political global front. Its proactive approach through early lockdown decisions has attracted immense praise from all over the world while well-developed countries like the US, Italy, and Spain were badly hit by viruses owing to their delay in executing lockdowns. Additionally, India has also been providing help to other countries especially in the Indian Ocean Region (IOR).

India has appeared as a new world supplier of medicines. It was the first country to respond to the needs of Seychelles and Mauritius and sent life-saving drugs to them; including hydroxychloroquine.[3] This medical help extended to nations has enabled India to improve its bad relations with countries like Iran and Malaysia, which were earlier tense due to those countries’ criticisms of India. This new cooperation has helped India to evacuate the Indians stuck in Iran.

Further, India has been applauded for its humanitarian efforts like evacuating people stuck in India to their respective countries. As a precautionary measure, it has additionally, quarantined those people before sending them back to their countries.[4] Consequently, a favorable global image of India has emerged, providing it an opportunity to become a world leader, replacing China.

India is as attractive for investment as China was, especially to the IOR countries. The eastern states provide a special and unexplored investment opportunity to India because they have the four factors of business profusely i.e. human capital, social capital, natural capital, and a developing physical capital.[5] India’s geopolitical and demographic advantages pose a good opportunity to attract global investors in the Indian economy. India has the skill and ability to take on China as it has the following positive aspects:

  • It has the 3rd largest railway transport in the world
  • Its electricity production is also ranked 3rd globally
  • It stands 2nd in the production and consumption of steel and coal
  • It has the 2nd largest mobile phone users and manufacturers globally
  • It ranks 4th in Diamond cutting and polishing worldwide
  • It is the 3rd largest Arms exporter globally.[6]

Conclusion and Suggestions:

India can take the following measures to grasp this lifetime opportunity to become a global leader:

  • Introduction of single window clearance for outside business to come in a few days
  • Making business environment easy by giving free land for a specific time and within 24 months, when the establishments become operational, they can pay the deferred cost.[7]

[1] China’s Role in Coronavirus Crisis and the New World Order Post the Pandemic (April 27, 2020, 12:51 P.M),

[2]Nilanjan Ghosh, How a changing global order will emerge in the post-Covid world (April 27, 2020, 5:25 P.M),

[3] Niranjan Marjani, India’s Indian Ocean Diplomacy in the COVID-19 Crisis (April 27, 2020, 2:40 P.M),

[4] Niranjan Marjani, India’s Indian Ocean Diplomacy in the COVID-19 Crisis (April 27, 2020, 2:40 P.M),

[5] Nilanjan Ghosh, How a changing global order will emerge in the post-Covid world (April 27, 2020, 2:55 P.M),

[6] Covid-19 Changes the World Order and India’s Global Role (April 27, 2020, 5:30 P.M),

[7]Covid-19 Changes the World Order and India’s Global Role (April 27, 2020, 5:10 P.M),

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