India

As Tension Brews, Chinese Firms Avoid Investing in Electronic Manufacturing in India

New Delhi (Sputnik): Economic ties between India and China have been strained since the Indian government banned 59 Chinese apps in the wake of the border conflict in Ladakh. Since then, the government has moved to curb imports from Beijing, and to promote Made-in-India products.

While 22 companies have reportedly shown interest in India’s production-linked investment scheme to manufacture mobile phones in country, Chinese companies remain conspicuous by their absence from the list.

Ruling out any ‘intentional exclusion’ of Chinese companies, India’s IT and Electronic Minister Ravi Shankar Prasad noted that the government received applications from global as well as domestic mobile phone manufacturing firms.

“PLI is only India positive. As regards the norms of investment are concerned, they are fixed by government of India. Be it in case of neighbouring countries or in terms of security clearances, all these norms have to be complied with. The companies that have applied have been welcomed.”

The 22 companies that have applied under the mobile phone Segment include Samsung, Foxcon Hon Hai, Rising Star, Wistron and Pegatron. The latter three are contract manufacturers for Apple iPhones.

Prasad added that the investments would lead to the production of mobile components worth $153 billion in the next five years, along with the generation of nearly 300,000 direct and 900,000 indirect jobs. The scheme is in line with the government’s make-in-India and self-reliant India (AtmaNirbhar Bharat) programmes.

India’s electronic sector is heavily dependent on Chinese imports, which comprise 32 percent of India’s total imports from its northern neighbour. The country imported Chinese electronics worth $19.97 billion in 2019.

Meanwhile, India has taken measures to limit the import of several other Chinese products including engineering goods, electronic equipment, railway and auto parts.

India recently extended import duty on Chinese solar equipment until July 2021 to promote local goods and manufacturing.

All these changes in economic policies come against a backdrop of border clashes between India and China in the Ladakh region which culminated in a clash on 15 June that resulted in deaths on both sides. India and China have accused each other of violating the loosely demarcated border, known as the line of actual control, in Ladakh.

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