Korean companies keen to move out of China to India

14/04/2020

Chennai: Rising trade war between US & China has pushed South Korean companies to consider moving some of their factories from China to India.

The Korean consulate in Chennai has been working with a number of requests, some in preliminary stages, while others advanced stages.

“We have requests from two iron and steel companies, some startups and one from the hospitality sector which wants to come to India from China,” said Yup Lee, the deputy consul general for the Consulate General of The Republic of Korea.

He said that the Indian government was keen to see Posco and Hyundai Steel, set up their factories in Andhra Pradesh. “They are looking for 5,000 acres of land and port connectivity,” said sources.

“The two companies agreed they would go to AP if they decide to invest,” Lee said. The decision to invest in new factories in India will be driven by an early return of growth in a Post-Covid world. “So far no actions from the two companies. Mainly because of low demand”.

Besides, these two giants, a number of small tech companies are also keen to invest in India.

“There are a number of companies which want to come to India. But with Covid, there might be some delays,” he added.

Only couple of days back Deepak Parekh, chairman of mortgage lender HDFC had said that Indian government must open up and receive Japanese companies which are keen to move out of China as part of de-risking strategy. The Japanese government is learnt to have spent nearly $2 billion to relocate companies out of China.

“We should make it easy for the Japanese to come to India rather than them going to Malaysia, Vietnam or Thailand. States have to take the initiative and offer them 2,000 to 5,000 acres in some special zone where they do not have to look for land or building approvals,” said Parekh.