India plans to become a global electronics manufacturing hub and the country’s government is working to attract international companies. Moreover, this country has resources to achieve this goal. On Tuesday, the country’s government introduced a $6.6 billion incentive scheme. The purpose of this scheme is to help international companies to produce more devices in the country.
Importantly, electronics manufacturing, especially the production and assembly of smartphones is very for the current government. Moreover, the production of smartphones is a cornerstone of Prime Minister Narendra Modi’s “Make in India” campaign. In recent years tech companies slowly but steadily started to leave China to diversify their supply chain. As a result, some of the companies opened assembly lines in Vietnam and India.
It is worth noting that, India is one of the world’s fastest-growing smartphone markets. Modi’s government provided incentives for smartphone companies to create factories in the country. Interestingly, top smartphone makers such as Apple, Xiaomi, and Samsung operate assembly lines in India for some of their handsets.
Moreover, according to the country’s government, the country had only two mobile phone factories in 2014 when Modi became the Prime Minister of India. Currently, the country is the second-largest mobile phone producer in the world.
India and international companies
As stated above, India has the potential to attract international companies. For example, the country is home to numerous startups. Moreover, India is famous around the world as the country which has good IT specialists.
Also, investors should not forget the human resources. As a result, it makes sense to invest in factories as well as other projects.
This is not the end of the story, as it is relatively easy when it comes to doing business in India, thanks to a competitive corporate tax rate and huge talent pool.
Additionally, as part of one of the initiatives announced on Tuesday, the government will provide production-linked cash incentives to companies, worth of 4% to 6% of incremental sales over five years. As a result, it will be easier to persuade international companies to produce smartphones in India.
Notably, as part of the scheme, up to five smartphone makers would be able to benefit this scheme. Furthermore, the rest of the schemes will be aimed at stepping up electronic components production as well as improving the infrastructure available to companies.
Many global brands already operate in India. Thus, it will be easier to convince the remaining brands to open their factories in the country.