PMO Panel Seeks Multinational Companies Inputs On Making India Electronics Hub
A high-level panel set up by the Prime Minister’s Office has sought inputs from over a dozen global companies, including Apple, Samsung and Intel, on what they need to make India their production base and an electronics export hub, underlining New Delhi’s aggressive push to attract foreign investment by wooing manufacturers away from China.
“The panel met with Taiwanese, Korean, American and European companies last week and is now working out a report on how to ease our domestic policies and wean these companies away to India as soon as possible,” a person briefed on the meeting told ET. Chinese companies were not a part of the meeting.
Emails sent to the companies and others including Cisco, Siemens, Foxconn, GE, HP and Bosch, went unanswered at press time.
“The panel, which is working at breakneck speed to submit its findings to the PMO, is of the opinion that the thrust of electronics exports has to be on smartphones,” another person familiar with the discussions told ET.
ET reported in its July 4 edition that in the wake of trade tensions between the US and China, the PMO had set up an inter-ministerial panel headed by Niti Aayog to quickly formulate economic policies to attract global electronic value chain companies to set up their manufacturing and export bases in India.
After oil, electronic products, including smartphones, are the largest contributor to India’s import bill. India sees the Sino-US trade tensions as a window of opportunity to offer itself as an attractive base for manufacturing and exports.
The government also realises that it must move fast. Vietnam has already attracted South Korea’s Samsung for manufacturing operations on the back of attractive sops. Cheaper imports from Vietnam through a free-trade agreement with ASEAN has hurt production in India.
Officials said smartphones comprise either the largest or second largest chunk of shipments of the top 10 importing nations such as the US, Germany and Japan. India must make it the highest priority to capture a large share of this pie.
“Total value of smartphones produced is estimated at about $485 billion and $283 billion out of this is exported. Our policies need to focus around this,” the first person said.
According to the second person, smartphone makers estimate that globally, the market is expected to touch $648 billion by 2025 and of this, $370 billion would be exports.
“The top three companies holding over 70% of the global value chain are Apple, Samsung and Huawei,” the official added.
However, Chinese companies such as Xiaomi, Oppo, Vivo and Huawei, which have captured over half of India’s smartphone market and are at the forefront of local manufacturing, were not part of the export panel meeting.
“There is a growing awareness that the Chinese will treat India simply as a market for their exports, not a hub to export from,” the first person said, outlining the possible reason for excluding them.
The second official highlighted that Chinese companies had set up their manufacturing base for mobile phones in India, but their growth had been at the expense of domestic brands such as Micromax, Intex and Karbonn.
“The phased manufacturing plan (PMP) of the government hasn’t really had the desired impact and the inter-ministerial panel feels the government policy must focus on ensuring electronics companies make India dollar-positive, not negative,” the first person added.―Business Telegraph
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