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Indian companies in China to ramp up investments

By Swati Deshpande,

Added 19 August 2019

Reveals survey undertaken by CII

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According to a new survey by Confederation of Indian Industry (CII) and Evalueserve, most Indian companies present in China are planning to continue to invest in China in 2019. This is the second such survey of Indian companies undertaken.

“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 significant impact of the current trade situation between the US and China on their business,” said Chandrajit Banerjee, Director General, CII.

The survey, “Business Climate for Indian Companies in China”, drew responses from 57 Indian companies in China. As per the survey, 98% 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 than in 2017. Of the surveyed companies, 30% 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 largest proportion, 72%, of Indian companies are invested in Shanghai, the most popular destination. 72% of the respondents have up to 50 employees and hire more than half the workforce locally, according to the report.

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. Quality of Products and Services continues to be a key success factor in China.

74% of the companies said that trade friction involving China and the US has had no impact on their business.

CII and Evalueserve launched the 2nd edition of the Survey of Indian companies in China, titled “Business Climate for Indian Companies in China”, a survey-based report on investments and operations of 57 Indian companies in China. The survey provides insights into respondents’ locations, business activities, investments and performance.

The survey sample is a diversified set, with each respondent showcasing its unique perspective. The report provides a summary of the entire survey and a comparison with 2018 survey results.

According to Sumeet Chander, Greater China Country Head, Evalueserve, ‘The results of 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’.

‘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 prioritize their resource allocation to their China engagement,’ said Mr Kamal Dhuper, Chairman, CII India Business Forum, China and President, NIIT (China) Ltd.

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