The Hong Kong Trade Development Council (HKTDC) has said that India, which remains the fastest-growing major economy in the world with robust economic growth of 7.6% projected in 2017, offers long-term business relocation opportunities for Hong Kong based companies.

Dickson Ho, Principal Economist (Asian and Emerging Markets), HKTDC said that with labour and other production costs rising on the Chinese mainland, companies are seeking alternative manufacturing bases in the region.

Ho was speaking at a press event organised for the release of HKTDC’s latest Export Index for the first quarter of 2017 (1Q17). He added that HKTDC's Research Department organised a recent visit to India to learn more about the opportunities and challenges.

The HKTDC officials said that the Indian government has also implemented a number of business-friendly policies to encourage foreign direct investment (FDI) in a wider range of industries. Together with the rising productivity of labour; there is a trend for foreign investors to set up production units or assembly plants.

Though jewellery was not specifically mentioned, the officials said that intereseted companies can initially consider relocating factories to the industrial parks of regions such as Andhra Pradesh, Telangana, Gujarat and Maharashtra, which hold leading positions in the Ease of Doing Business (EODB) Reform Rankings.

The HKTDC, which monitors the sentiment of Hong Kong traders and gauges near-term export prospects, said its Export Index rose to 47.1, an increase of 13.4 from the fourth quarter of 2016, marking the biggest jump in recent years, although it remains below the watershed mark of 50.

“Export confidence is on the mend. We forecast export volume to increase 0.5 per cent and export value to remain flat in 2017," said Nicholas Kwan, Director of Research, HKTDC.