They could be persuaded to manufacture items that are being subject to higher import tariff from the US as they originate from China. Some of the areas in which these global firms could invest are telecom, automobile and pharmaceuticals.
iPhone maker Apple and Taiwan-based contract manufacturer Pegatron Corp are some of the companies that India is eyeing for setting up their facilities.
The recent trade conflict between US and China with both countries raising tariffs, taking a tit-for-tat approach, have increasingly been making the trade of goods worth billions of dollars unviable. This has disrupted supply of global suppliers which used China as a hub for manufacturing.
As a result, some of these manufacturing giants have started looking for new countries where they could move their investment. Vietnam and Thailand have seen some of the investment flowing in and India could emerge as major manufacturing destination.
"A plan has been there to attract companies leaving China owing to trade war concerns," said an official aware of the development.
Presenting the Union Budget for FY20 last month, Finance Minister Nirmala Sitharaman had said that in order to boost economic growth and Make in India, the government will launch a scheme to invite global companies to set up mega manufacturing plants in sunrise and advanced technology areas such as semi-conductor fabrication (FAB), solar photo voltaic cells, lithium storage batteries and laptops.
She had said that companies setting up mega units would get investment linked income tax exemptions under section 35 AD of the Income Tax Act and other indirect tax benefits.
"On budget announcements, the government is moving swiftly," another official said.
In what is expected to attract global players to invest in India, the government has eased foreign direct investment (FDI) norms in digital media, mining and single-brand retail. The rules for local sourcing have also been relaxed.
( With inputs from IANS )