India woos tech companies amidst US-China trade war: report
20 November 2019
India is targeting companies, including Tesla, Apple, Foxconn and Wistron with a view to encourage them to shift business out of China where an ongoing trade war with the United States has hit production and sales.
Reports citing documents with some Indian officials engaged representatives of target companies like Apple, Foxconn and Wistron in free and frank discussions on 14 August over shifting of production lines to India for direct manufacture in India.
With high tariffs curbing production and sales in China, Indian officials are reported to have discussed `Make-in-India’ possibilities with several companies, including Taiwan-headquartered contract manufacturer Pegatron.
The dispute between the United States and China, the world’s two largest economies, has led to higher tariffs on goods worth billions of dollars and disrupted global supply chains, prompting companies to look at other investment avenues to escape higher tariffs.
Officials of Invest India, the country’s foreign investment promotion agency, met representatives of major foreign companies in sectors like electronics, autos, pharmaceuticals and telecom to explain policies and incentive structures for investments in the various industries.
India, however, seems to be too late to capitalize on the trade war as the months-long trade war between China and the US are now showing signs of ending and companies may not be in a mood to shift base at this stage.
The officials who met with representatives of companies between 26 August and 5 September are expected to have suggested options regarding investment zones and the level of incentives for investors.
Indian officials this week separately met local delegates of automakers including Volkswagen, Hyundai and Honda to see if they would consider moving some supply chain operations from China to India.
It is not clear whether the government has offered any fresh incentives, the move is partly aimed at easing the likely burden of a Regional Comprehensive Economic Partnership (RCEP) sans India that would take away even the existing manufacturing base in India.
As thigs stand, companies are looking at ASEAN neighbours like Vietnam and Thailand for shifting production and supply chain out of uncertain China.
Japan’s Nikkei business daily on Wednesday reported that Alphabet’s Google is shifting its Pixel smartphone production to Vietnam from China starting this year.
Clearly, India with its huge market missed the bus and the country can no more waste time in catching up with its rivals.
India is the world’s second-biggest smartphone market with huge room for growth. But manufacturers have not yet confirmed views about manufacturing in India.