Indian companies make a beeline to set up manufacturing units in Bhutan in the absence of a conducive atmosphere in Assam and other Northeast states
Assam’s immediate international neighbour, Bhutan, is eating into its business pie thanks to the non-conducive business environment in the state which has prompted Indian business houses to seek a safe haven in the Himalayan Kingdom.
Bhutan, which allows 100 per cent Foreign Direct Investment in information and technology sectors, has attracted Indian companies like Infosys, Genpact and Wirpo to set up shop in the country. The country has also relaxed its investment laws for Indian investors which otherwise stipulate investment in its local currency.
To attract manufacturing companies from India, Bhutan has also liberalized its manufacturing sector. Notably, by 2020 both India and Bhutan have agreed to 11,000 MW of hydropower and many Indian energy major companies have already set their sights on Bhutan overlooking the northeastern states which have capacity in abundance to generate hydro power.
There are about 14 Indian companies with investments in Bhutan. The country is extremely keen to attract more investments from India. Its regulations have been made much more conducive and flexible allowing Indian investors to invest in rupees.
According to sources in the industrial department, the lack of a clear-cut policy and stigma associated with the region’s business environment due to its history of insurgency is still proving to be a deterrent to its industrial development.
Moreover, lack of cheap commercial power in states like Assam is another dampener for potential investors opting for Bhutan as the country has maintained the cheapest electricity rates in South Asia.
Due to lack of any subsidized policy and incentive, Indian business houses are clearly not showing any keen interest to invest in Assam despite the government’s attempt at luring the industrial behemoths by organizing programmes like the Global Investors’ Summit.
Just recently, Assam Industries Minister, Chandra Mohan Patowary, had urged the Centre to formulate a special and progressive policy similar to the North East Industrial and Investment Promotion Policy (NEIPP) which should be exclusive to the region.