India puts up Rs 200 billion to attract global electronics makers

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A report says that India has put up a massive 200 billion on the table to lure global electronics makers to set up shop here. But it is not been able to lure China. India’s electronics system design and manufacturing initiative aims to slash the country’s import bill for electronics goods. As part of its push, India is sending trade delegations to various countries, offering sops like tax breaks, to attract investment in electronics. But no team will be visiting China, where more than half the world’s contract manufacturing in electronics takes place.

Currently, India’s production constitutes only about 1.3 per cent of the global electronics hardware production of US$ 1.7 trillion. In contrast, China is home to some of the largest electronics manufacturers such as Foxconn, Huawei and ZTE. Foxconn supplies components to almost all popular electronics brands, including Apple and Nokia. On the other hand, Huawei and ZTE have over the past couple of years become the preferred equipment vendors for telecom operators worldwide, including Indian players like Airtel and Reliance, states the report.

A senior Pricewaterhouse Coopers consultant on e-governance said even if India tried to invite Chinese companies, it was not likely to succeed. “India remains a high cost country for electronics manufacturing in contrast with China,” said the PwC executive who did not wish to be identified. “It’s an investment promotion scheme, and would be prudent to invite countries where cost of manufacturing is higher than in India, like Japan.”

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