India’s $6.6 billion incentive program to help compete with China in manufacturing
India is a good position to turn into a next manufacturing hub. The pandemic revealed an existing weakness i.e. China being the only manufacturing destination, which played havoc and caused massive disruption in the supply chain. However, companies all around the world are now looking for diversifying in a move to de-risk the manufacturing.
According to analysts, India’s new incentive program to attract global smartphone-makers to set up factories there will give it a long-term edge over China in competing for manufacturing. Furthermore, government also announced that it would set aside 500 billion rupees ($6.6 billion) over the next five years to bring in global companies to set up facilities to make products across the smartphone supply chain.
As part of the program, the government will offer subsidies to qualified companies equal to 4% to 6% of incremental sales of the goods they manufacture in India over the five-year period. It will also offer these companies subsidies on their capital expenditures on an identified list of products including electronics components and semiconductors.
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