Several Taiwanese electronics manufacturers plan to increase their investment in India this year, as they seek to take advantage of Indian Prime Minister Narendra Modi’s “Make In India” initiative to cultivate another source of revenue growth.
Hon Hai Precision Industry Co (鴻海精密), Inventec Corp (英業達), Compal Electronics Inc (仁寶) and Wistron Corp (緯創) have so far invested in new manufacturing plants in India.
Some of them are planning to expand production capacity there this year, company officials said.
Hon Hai’s country head and managing director for India, Josh Foulger, was quoted by the Hindustan Times in January as saying that the company is looking at expanding its presence to a few more Indian states in the next few months.
Compal president Ray Chen (陳瑞聰) earlier said the company’s plant in India would begin smartphone shipments this month, with an initial production of 500,000 units a month.
“The company plans to increase the production capacity of the plant in accordance with the clients’ demand there,” a Compal official said by telephone yesterday.
Compal said that its Indian plant mainly produces smartphones for the company’s Chinese, Taiwanese and Indian clients for the local smartphone market.
Wistron is working with India’s Optiemus Infracom Ltd to invest US$200 million in a joint venture to establish an assembly plant in India in the next five years.
Wistron chairman Simon Lin (林憲銘) on Friday last week told investors that the plant already started a small amount of production recently, with shipment volume likely to pick up over the next few months.
Lin said the production capacity of the plant would gradually reach 1.5 million units per month between the second half of this year and the beginning of next year.
Pegatron Corp (和碩), one of the main assemblers of Apple Inc’s iPhone, is also assessing the feasibility of investing in India and is to make a decision on whether to set up a new manufacturing plant there sometime this year.
“We have not decided yet, but we think a location near central coastal area [in India] is an option,” Pegatron chief executive officer Jason Cheng (程建中) said on March 17.
Under the company’s plan, a future plant in India would not only produce smartphones, but also other products to keep the plant flexible, he said.
However, Inventec, which was the first Taiwanese electronics maker to set up a new plant in India last year, has decided to slow down its expansion plan in India due to problems involving infrastructure construction.
Inventec chief financial officer Yu Chin-pao (游進寶) on Tuesday last week said the company might not see a “breakthrough” in shipment volume in the Indian plant this year.
“The infrastructure construction there is more complicated than our previous expectation. Plus, we experienced some policy changes of the local government… The overall progress in the India’s plant will slow down this year,” Yu said.
Infrastructure, utility and water supply are issues that Taiwanese manufacturers encounter in India.
Last year, Taiwanese firms made seven direct investment proposals ino in India, leading total investments to jump by 115.51 percent to US$72 million from US$33.48 million a year earlier, Investment Commission data showed.
The Ministry of Economic Affairs and India host a vice-ministerial meeting on bilateral trade and investment issues, including discussions on the possibility of an economic cooperation agreement (ECA), on an annual basis.
The two sides last such meeting was in January last year.
The Bureau of Foreign Trade yesterday said that it still hopes to convene this year’s meeting in the first half of this year, but the ministry does not have a specific timeframe for the meeting.
“It will depend on the availability of both Taiwan and India’s schedule,” a bureau official in charge of convening the bilateral talks said by telephone.
During the meeting last year, the Indian government had turned down Taiwan’s request to take a further step toward an ECA for the time being, as India said it was focusing on joining the Regional Comprehensive Economic Partnership.
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