China-based appliance manufacturer Haier group has envisioned a Joint venture with the Sajjan Jindal led- JSW group to pull through an investment of Rs 1,000 Crore as it maneuvers to tackle the regulations. 

Government’s Mandate 
As per the Press Note 3, any entity based in countries that India shares its borders with such as Pakistan, Afghanistan, Nepal, China, Myanmar & Bangladesh can invest in India only after proper government approval. Further, the proposal submitted is reviewed by an inter-ministerial committee headed by the home secretary.

Why a Joint venture? 
The company has been facing prolonged delays in securing the government’s approval for a fresh infusion which renders it unable to ramp up its manufacturing goals, eventually disabling it to compete in the Indian appliance market with full capacity. Reportedly, the Haier group aims to keep the majority stake under the JSW group. 

Thus to combat these problems and fulfill its commitment to expanding its market, the Haier Group eyes to establish a Joint Venture with the JSW to ramp up its manufacturing facilities in India. Hence, ensuring itself a proper ground to fuel its growth in India. However, the details regarding the future working of the JV remain unknown. 

Status of the  Proposal 
The government has already received the proposal while it currently lies with the inter-ministerial committee, as per the Press Note 3 of 2020, for scrutiny, ET reports. 

How’s the market? 
The Haier Group currently operates two manufacturing facilities in India: one in Noida, Uttar Pradesh, and the other in Pune, Maharashtra. It is one of the major Home Appliances players in India including homegrown companies like Voltas, Bajaj, Godrej, and Global Brands like Samsung, Bosch & Whirlpool. 

It has a market of around Rs 8,000 Crore in India, making India the third largest market for Haier after China and the US coupled with a consolidated manufacturing capacity of 9 Million Units annually. Interestingly, JSW Steel, a company under the JSW group, is one of the largest suppliers to the white goods manufacturers. 

It had vowed earlier this year to line up a huge expansion plan in India.  

Economy Needs Investment
The latest Economic Report submitted to the government of India suggests the government either to allow FDI from China or to rope in India in its supply chain. It further urges the government to allow Chinese companies to invest in India to fulfill the trade deficit. Such steps would help alleviate the trade deficit challenge confronting the Indian Economy.