India To Invest $2.1 Billion In Laptops, Tablet Manufacturing

In a drive to further solidify its status as a global hub for gadget manufacturing, the Indian government, under Prime Minister Narendra Modi, has rolled out a new $2.1 billion incentive plan to lure laptop and tablet makers. This move comes after India's impressive success in attracting international smartphone manufacturers to its shores, a feat largely accomplished by the 'Make in India' initiative.

The Modi administration is building upon its previous accomplishment of drawing tech giant Apple Inc. into local assembly operations, a venture that now contributes to the production of 7% of all iPhones globally. The new scheme aims to persuade Apple to extend its manufacturing activities to include high-end products, such as iPads and MacBook notebooks, further entrenching India's presence in global tech production.

This initiative is also designed to tap into the changing global production dynamics in the wake of the COVID-19 pandemic. The resulting lockdowns and geopolitical tensions, particularly between the US and China and concerns surrounding Taiwan, have disrupted global supply chains, forcing multinational corporations to rethink their manufacturing strategies. Amidst this, India is positioning itself as an attractive alternative for production diversification.

The scheme also opens doors for other major manufacturers like Dell, Lenovo, HP, and Asus, who could potentially reap significant benefits from the Indian government's new incentive plan.

"We have crossed a substantial milestone with mobile phone exports of $11 billion in the past year," said Ashwini Vaishnaw, India's technology minister, at a recent news conference. "Our aim is to propel this momentum forward."

The scheme offers a 5% cash back to companies on factory gate prices of the finished products, with additional financial incentives for those sourcing components locally.

India’s 2021 program to stimulate local manufacturing and IT product exports had a limited impact beyond boosting smartphone production. The incentives were deemed too meager to attract major manufacturers. Lenovo, one of the largest laptop manufacturers globally, did not benefit from the scheme, largely due to the strained relations between India and China following the Galwan border skirmish. However, beyond Lenovo, most key players in the laptop and tablet markets originate from the US, South Korea, and Taiwan, making India an appealing prospect for these countries.

Indian manufacturing ambitions also touch the chip manufacturing spectrum. The Vedanta Group and Foxconn have formed a joint venture to create the first fab in India, which will work on a 16-nm node as its most advanced capability.