Undeterred by the possibility of US-China trade tensions rising and encouraged by a profitable 2018, Indian firms are likely to continue investing in China this year, according to an industry survey.The Business Climate for Indian Companies in China survey, conducted by Confederation of Indian Industry and Evalueserve, showed that 98% of Indian businesses in China planned to make some investments in the country in 2019 and 39% planned to boost their investment.
About two-thirds of respondents said that their business was ‘profitable’ or ‘very profitable’ in 2018. 30% firms generated revenues of over 100 million yuan ($14.2 million) in 2018 and 79% stated that revenues either remained stable or rose in 2018.
The survey, which drew responses from 57 Indian firms operating in China, also found that 74% of such businesses felt no impact of the US-China trade friction.
As many as 56% of participants also felt that the regulatory environment for research and development-led innovation was more favourable in China against the rest of the world. When asked to identify key areas in which Chinese firms are more innovative than Indian ones, 44% pointed to product and service innovation, 35% to business model innovation, 12% to process innovation and 9% to ‘go-to-market innovation’.
High labour costs, finding and retaining talent and dealing with stricter regulations were the key issues that these businesses are facing.