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In just seven years, from 2014 to 2021, nearly 3,000 multinational companies left India. There are only 12,000 registered and operating foreign companies in India.
Nearly a quarter of foreign companies flee from foreign companies, which is a shocking statistic: how difficult is India's work, so that capitals for profit-seeking purposes have fled?
India's economic growth has been evident in the past decade, and in 2022 it will become the fifth largest economy in the world.
In addition, India is a populous country in the subcontinent and has low labor costs, and many countries and enterprises have regarded it as a manufacturing OEM country, and have set up subsidiaries and offices in India.
India's market and business opportunities, no matter how you look at it, should be the darling of capital and foreign companies.
Reality is always a punch in the face. India's attitude towards foreign companies is not so sincere. To put it bluntly, they only want to use them to lead their country to become rich, but fundamentally they do not have the consciousness and pattern of cooperation and win-win, and they do not want them to take away benefits from their country.
Let's take a look at the well-known companies that have failed or been hit hard from India in recent years.
From the early American car old brands: Ford, GM, motorcycle leader Harley-Davidson, retail giant Walmart, Citibank, South Korea's POSCO... TO VIVO, MILLET AND MANY MORE ON THE MAINLAND.
Manufacturing, retail, communications, infrastructure... These foreign companies are not only involved in many fields, but also come from different countries. It can be seen that India's unfriendliness with foreign companies is not aimed at any country, but without exception.
Analyzing the psychology of India, to put it bluntly, it is the national heart. In order to protect their own interests, it is inevitable that they will eat ugly.
How bad is India's business environment for foreign companies? Let's look at a few data.
It takes at least eighteen days to register a new business in India. To prepare for construction, applying for a building permit requires nearly forty procedures, which cannot be completed in less than four months.
As for many matters such as connecting water and electricity, it is completely a piece of cake to let enterprises wait for another fifty or sixty days.
After the operation of foreign-funded enterprises, India's tax authorities were even more unceremonious, and it was common for them to investigate from three to five places in order to find out problems.
For example, in 2022, the Indian government recovered a fine of about 550 million yuan from Xiaomi in the name of so-called "tax evasion".
At the same time, the deposits of two Chinese-funded companies, Xiaomi and vivo mobile phones, in Indian banks, have been seized and frozen for a cumulative total of more than 500000 yuan.
Later, OPPO was also accused of tax evasion, amounting to nearly 400000 yuan. Seeing this, Honor Mobile directly announced that it withdrew and did not play with India.
Obviously, India spares no effort to crack down on Chinese smartphone brands in order to exclude Chinese companies from joining the Indian 5G market. The so-called protection of "national security" is used to achieve the purpose of protecting the country's capital economy.
Be wary of foreign capital and find ways to prevent foreign companies from taking away the profits they have made in India. That is to say, through the tax policy, it is necessary to keep the money earned by foreign capital in India.
This kind of technique and routine has long been familiar and perfect in India.
In that year, Vodafone of the United Kingdom acquired the telecommunications business of Hedian in India, and was issued a tax "fine" of nearly $3 billion by the Indian government.
Vodafone refused to comply, and the Indian government did not hesitate to amend the tax law to "lie" this amount. The lawsuit ended up in The Hague court, and Vodafone kept the IQ tax, but has never been willing to intersect with the Indian market since.
Walmart, Samsung, Nokia, IBM... These well-known enterprises from different regions and industries in different parts of the world have been "repaired" by India with huge fines in terms of taxation.
All of the above has made India's reputation not much better, and it even has a terrifying title - the graveyard of multinational enterprises.
Does India not need foreign capital to do this? Do you just want to develop inward and be self-reliant?
Apparently not!
India also has the dream of becoming a strong country, and Modi mentioned in his Independence Day speech in 2022 that India will become a developed country within 25 years. To achieve this goal, it is necessary to introduce foreign investment and achieve "Make in India".
India has always wanted to become the new "factory of the world" and has spared no effort to put it into action to attract multinational companies to move their production bases out of China.
It is undeniable that this also coincides with the desire of some countries to "contain China", so it has their support from the point of view.
Take Apple, for example, the financial report for the first quarter of 2023 shows that India shows a rare upward trend compared to markets such as North America and Japan.
This made them feel that India would replace China as Apple's main market and production base. But lucky people like Apple are rare in India.
The Indian government has eased investment restrictions in order to attract foreign investment. Large demographic dividend, low market cost, deep market potential... These obvious advantages once attracted a lot of foreign investment.
But after foreign capital entered the Indian market, they discovered the gap between imagination and reality.
India's uncertainty in economic reform policies, the ambivalence of both love and hate for foreign investment, and the extremely complex and rapidly changing tax policy have made the business environment in India less friendly for foreign companies than expected.
In addition, the infrastructure is not perfect, and the quality of workers is not high.
All this may discourage foreign investment.
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