Indian companies plan to invest more in China in 2019, says CII survey

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Updated: Aug 19, 2019 17:24 IST

Indian companies operating in China do not expect any significant impact of the escalating trade war between Beijing and Washington on their business, a new survey conducted by the Confederation of Indian Industry (CII) has said, adding that most of these companies plan to invest more in Beijing in 2019.

Their optimism, however, is tempered with caution, the survey found.

“The survey of Indian companies working in China shows cautious optimism and confidence as compared to the previous survey last year. Most companies do not see a significant impact of the current trade situation between the US and China on their business,” said Chandrajit Banerjee, director-general, CII, was quoted in the survey as saying.

“Among the challenges, while half the companies felt China’s innovation is more favourable than the worldwide average, rising labour cost, finding and retaining talent and stricter regulations were the top-cited issues,” the survey said.

More than 120 Indian companies operate in China apart from a sizeable number of traders who have offices here; 57 of the companies responded to the CII questionnaire.

“The survey, “Business Climate for Indian Companies in China”, drew responses from 57 Indian companies in China,” the CII statement said. It was jointly conducted with Evalueserve, a global data management company.

The survey took into account into respondents’ locations, business activities, investments, and performance.

According to the survey, “…98 percent of the respondents plan to make some investments in China in 2019 with two-fifths considering ramping up their investments over 2018. More IT and BPO companies plan to make additional investments in 2019 compared to 2018.”

Two thirds of the companies said that their business was very profitable or profitable in 2018, with higher EBIT (earnings before income tax) than in 2017.

“Of the surveyed companies, 30 percent generated revenues higher than CNY 100 million from China in 2018 and four of five respondents stated that their revenues in 2018 were higher than in the previous year,” the survey found.

“The results of the survey clearly indicate that the deep economic relationship between India and China will continue to grow. It is evident from the growth plans that Indian companies have for the Chinese market,” Sumeet Chander, Greater China country head, Evalueserve, was quoted as saying in the CII statement.

‘The CII-Evaluserve survey is an attempt to continuously gauge the performance of Indian companies in China, to understand the challenges they face and help Indian companies and Indian CEOs prioritise their resource allocation to their China engagement’ said Kamal Dhuper, country Head-NIIT China said.