November 6, 2018 3 min read

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LiuGong India, a wholly owned subsidiary of China-based Guangxi LiuGong, a heavy equipment maker is planning to invest 2.5 billion in India with the motive of making it a sourcing hub. This move indicates that the business world, irrespective of the tensions in the political arena, believes in seeing the world in a totally different light.This will also strengthen India's position as an economic superpower is making a huge investment.

How it all started?

Liugong was founded in 1958 in Liuzhou, China. It was in 2007, that this Chinese company set up its first overseas manufacturing plant and a Research and Development Centre in India. In January this year, the machinery manufacturer completed 15 years of business in India. Liugong has had an exhilarating journey from starting out like a wheel manufacturer to becoming a global manufacturer. Liugong in all has 20 manufacturing plants, of which 17 are in China and the rest are in Poland, Brazil and India.

Nischal Mehrotra, National Sales and Marketing Director of Liugong India said, “We are committed to making in India. Planning to make India as a second global sourcing hub after China for some products for certain international markets.” This is just a single drop in the ocean of opportunities that India needs to progress as a nation and as an economy.

Talking About India’s Growth

Mehrotra also said that said the company believes in India's growth story in the long run despite recent crises like IL&FS default which led to an abrupt slowdown in project execution besides impacting demand for the last two months. He also highlighted that it has cumulatively sold over 4,000 machines in India and in the current fiscal the company hopes to sell 1,500 units.

The Chinese outfit has invested about Rs 3 billion in its existing manufacturing base at Pitampura in Madhya Pradesh during the last 10 years but the company has proposed to pump Rs 2.50 billion in near future once the new emission norms are notified. Hydraulic excavators and compactors will be sourced from India for exports to the Middle East, Africa and SAARC countries, the company.

Analysing India-China Relations

India and China relations have been conflicting for a long time. This comes as a breath of relief. The cross-border tensions are apparent. However, business deals can become a source of positivism within the rationality of these relations. The political and business perspective of China towards India is poles apart. While, in the political arena, there is constancy of disturbances while businessmen and Chinese investors look at India beyond the political know-how of circumstances. This move clearly proves that China looks India in a positive light when it comes to business and sees the potential of returns in investments they are making.