India is a crucial destination for companies to expand their supply chain footprint : Ashwini Vaishnaw

The several initiatives undertaken by the government like production-linked incentive (PLI) schemes and abolishing archaic laws and compliances, have placed India as a crucial destination for companies to expand their supply chain footprint, communications, IT and railways minister Ashwini Vaishnaw has said.

During a discussion at the World Economic Forum (WEF) 2023 in Davos on Wednesday, Vaishnaw said “people want effective and resilient supply chains,” adding that cost efficiency is “no longer the sole factor for the supply chains to be differentiated.”

“Supply chains have to work with whatever the magnitude of global disruption may be,” he said, pointing to various global disruptions in the last few years. “There would be many supply chain partners who are looking at alternate geographies or new places,” the minister said. “And India is of course a very important destination.”

Over the last year and a half, assembly activities have increased in India and the wider component supply chain is shifting into the country, Vaishnaw said adding that homegrown companies are building components as well as playing a critical role in many parts of the supply chain. “And that is what is very, very encouraging… It is adding jobs and creating new economic opportunities,”

The minister further said, “Are we likely to do more PLIs? Yes. For example, hardware, servers, laptops, or PCs. This approach has worked quite well and there would be more sectors.”

The government launched the PLI scheme for handset manufacturing in 2020 to attract manufacturers from dominant geographies such as China and Vietnam. India is trying t catch up with the two countries which are still leading in mobile exports on the back of this scheme. India, on its part, aims to export mobile phones to the tune of $60 billion by 2025-26.

Three contract manufacturers of Apple–Wistron, Foxconn, and Pegatron – along with the Korean major Samsung are a part of the handset PLI scheme.

Vaishnaw said there was regulatory stability in India and cited the reforms in the telecom sector which have reduced the time for getting permissions. He said earlier it used to take 7-8 months for permission for telecom tower, but now “in 70% to 80% of the cases, it happens instantaneously”.

“Things are improving sector after sector,” the minister said. Space has been opened to private industry. There are young startups who are now launching satellites.”