Nation could offer South Asian giant lesson in attracting foreign firms: expert

US chipmaker Qualcomm has announced plans to build a multimillion-dollar plant in India, as the country moves to learn from China’s reform and opening-up measures to attract foreign investment, analysts said.

The US company will invest $400 million in setting up a new campus in Hyderabad, which will also be its largest facility outside the US, Indian media reported during the weekend, citing Minister of Information Technology of Telangana.

Qualcomm is expected to kick off the construction of the campus in 2019, and the project will boost the development of the local semiconductor and electronics industries, according to media reports.

The Indian government has launched policies to attract foreign investment in recent years, in a bid to boost the growth of one of the largest economies in Asia.

Qualcomm is tapping into the Indian market for its huge potential in telecommunications and a large, low-cost pool of technology staff, Tian Guangqiang, assistant research fellow with the National Institute of International Strategy at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

“Localizing its production there will also help reduce tariff barriers,” he said.

While Chinese companies such as Huawei and ZTE are now in a leading position in the telecoms sector, Qualcomm is likely to have limited cooperation with Chinese companies in India, as the local government still considers the sector as being “highly related to national security,” Tian noted.

In spite of strong incentives by the Indian government to attract foreign capital, the growth rate of foreign direct investment (FDI) to the country hit five-year low from 2017-18, the Press Trust of India reported in July. FDI in 2017-18 grew by only 3 percent to $44.85 billion, according to the report.

“India has learned from Chi-

na in setting up special economic zones to attract foreign investors. But local authorities have to adopt more proactive measures to turn policies into reality, like what the Chinese government did,” Tian said.

Favorable land and tax policies should be carried out, and infrastructure facilities should be improved, he mentioned.

“As a federal country, local governments (in India) sometimes hold a different attitude in supporting special economic zones, which might hinder its development,” Tian said.