Considering that President-elect Trump has threatened to slap Chinese imports with 60% tariffs, trade tensions between the US and China could escalate to a new level, which could cause multinational companies’ exodus from the world’s second-largest economy and their rush to find new manufacturing bases in India, market analysts said.“India is expected to enjoy great geopolitical benefits from Trump’s victory,” said Lee Jun-jae, a portfolio manager at Samsung Asset Management Co.“India’s importance in the global supply chain will rise further as an alternative to China.”INDIA, THE RISING GIANT IN THE GLOBAL SUPPLY CHAIN To unlock the opportunities, the Indian government has been upping the ante to woo foreign companies fleeing China.
The administration under Prime Minister Narendra Modi has earmarked a historic high of 11 trillion rupees ($130.4 billion) for the country’s infrastructure investment and lowered the country's corporate tax rates for foreign companies by 5 percentage points.“The Indian government has not yet used 8.5 trillion rupees of the 11 trillion rupees,” said Hyun Dong-sik, head of the overseas business division at Korea Investment Management Co.“Because the (Indian) government’s incentive budget is on a steady growth, the country’s economy is set to continue growing on stimulus measures in the second half.”In anticipation of further growth in the Indian economy, Korean asset managers have rushed to launch new financial products investing in Indian securities.
BUYING THE DIPS But Korean retail investors saw the falls as opportunities to buy the dips and net-purchased about 8.1 billion won ($5.8 million) worth of the Samsung KODEX India Nifty50 ETF and 11.5 billion won worth of the Mirae Asset Tiger India Nifty50 ETF over the same period.
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