4 ms·
The 30% local sourcing rule is just one aspect to encourage local manufacturing, employment and capacity building for companies that want to start their own "si
by wtmt 7y ago
The 30% local sourcing rule is just one aspect to encourage local manufacturing, employment and capacity building for companies that want to start their own "single brand" stores. I personally don't think that will help a lot, though it does add pressure on some companies like Apple, now that it has realized after a long time that India's market ought to be tapped after the slowdown in China and near saturation elsewhere (Apple did not focus on India for a very, very long time, and the country barely got any attention — Apple's services are also extremely poor in India. Apple Maps is far, far behind Google Maps, and Siri doesn't recognize Indian accents well).
India should have encouraged manufacturing and assembly of semiconductors and electronics a long time ago, but successive governments didn't do much about it with urgency. The infrastructure for this is quite weak (especially in comparison to China and Taiwan). Add to this issues with electricity (there are periodic power cuts in most cities) and other infrastructure issues, it's more difficult for companies to get things done. That's where companies like Foxconn, which have had a presence in India to assemble computers and other accessories, have an advantage in ramping up.
After crude oil imports, the import of electronic goods stands second (or sometimes third, after gold) in terms of foreign exchange outgo and the current account deficit. This is a huge problem for the government. In the last two decades, India has achieved a lot, mainly through the private sector, on mobile phone usage penetration, and India has the lowest (or one of the lowest) cellular plan pricing in the world. But it still lags on other related fronts, like great devices to take full advantage of the network and the Internet while remaining secure. High import tariffs on these products make them inaccessible to most people, and they have to make do with cheaper and inferior products. So I personally don't support high tariffs on products that can accelerate the way people connect and what they can achieve.
- igravious 7y agoThanks for taking the time to share that.