Key Points
New Delhi: With Elon Musk confirming that he will be visiting India and speculation rife about his expected investment announcements, a look at Indias state-wise foreign direct investments (FDI) shows that multinational companies seem to favour just a few states, and stick with those over the years.. Further, auto companies, especially foreign ones, have particular requirements such as access to ports, a network of ancillary services, and a ready catchment area for talent that not only make them gravitate towards particular states but also make it difficult for other states to catch up as attractive investment destinations...
Coming just about a month after the central government eased import duties for foreign electric vehicle makers, Musks announcement elicited much speculation about a potential investment by Tesla in India...
If you look at all of these regions, there is a proximity of ports and both exports and imports can happen relatively easier from these locations, Sharma said, speaking about the coastal states, such as Tamil Nadu, Maharashtra, and Gujarat, that have become auto hubs...
The other important factor working in the favour of these states is that, having initially attracted auto investments due to their proximity to ports, they made good use of that advantage to develop infrastructure, logistics, and help auto ancillary industries to also come up...
According to a senior manager in a prominent Southeast Asian auto company with heavy investments in India, the company decided to diversify its investments from the southern states and instead move to Gujarat and Maharashtra because floods in some of the states had inflicted serious damage to their manufacturing facilities...
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