"Sectors which are lagging behind at this stage is leather, food processing, metal products," said Chhaochharia.
The ongoing US-China trade war, rising costs, tougher trade and environmental norms, could lead to a shift of manufacturing away from China, a UBS survey revealed and this could be a real opportunity for India. Gautam Chhaochharia, MD and head of India Research for UBS Securities, spoke at length about the report.
Chhaochharia said for this project they did multiple surveys. "We did a CFO survey in the US about FDI interest and we did a CFO survey of India. In India, we surveyed 244 CFOs or CEOs and we consciously made it that 70 percent of them are smaller than Rs 500 crore turnover because it’s all the listed companies we speak to," Chhaochharia told CNBC-TV18 on May 7.
"A bulk of the listed universe in India is not necessarily manufacturing and export-oriented, their mindset is about local market size opportunity to get a higher PE multiple. So we surveyed all these guys and if we look at China and North Asia survey, the move away from China is going to be there for a longer term. It’s not just about the US-China thing, it's a catalyst for sure and it will remain an overhang, but also about cost, regulation, other factors and interestingly opportunity in other markets; even the Chinese CFOs are looking for opportunities in other markets and that is where India comes out well," Chhaochharia said.
Sharing more insights on the survey, he said, "In India CFO survey, 85 percent told us that they have seen an increase in FDI interest as well as an increase in interest from Chinese companies looking to collaborate on manufacturing."
"Apparels, industrial and electronics and electrical goods are sectors where we are seeing the most opportunity. Sectors which are lagging behind at this stage is leather, food processing, metal products," added Chhaochharia.
Source: CNBC-TV18
