Geopolitical tensions between India and China are beginning to hurt some of Taiwan’s biggest technology companies, including suppliers to Apple Inc and hindering New Delhi’s much-vaunted incentive program for electronics manufacturing.
India has been slow to issue visas to Chinese engineers, who are needed to help Taiwanese companies set up factories in the South Asian nation, people with knowledge of the matter said. India is also nudging companies to opt for the more difficult to obtain employment permits, they added, asking not to be identified discussing a private matter.
The wrangling may delay Prime Minister Narendra Modi’s plan to bolster India’s manufacturing capacity and deter overseas investors, who invested US$30 billion in the six months to September, with the maximum foreign direct investment flowing in the computer hardware and software sector. The companies are looking to India to diversify their supply chains. Modi has banned hundreds of Chinese apps and slowed approvals for Chinese investment after a deadly clash along the disputed border between the two neighbors left 20 Indian and an unknown number of Chinese soldiers dead.
Last year, companies such as iPhone assemblers — Foxconn Technology Group, Pegatron Corp, and Wistron Corp — along with many others pledged US$1.5 billion to set up mobile-phone plants in India after the Modi government offered them specially-designed incentives to manufacture their products locally for global export. The move was also expected to shift supply lines to India from China.
Visas are an important resource to help expand domestic manufacturing and the “government has to balance its existing policies with the genuine and short-term requirements of technical manpower for setting up new factories,” said Pankaj Mohindroo, chairman of the India Cellular and Electronics Association. “We are hopeful that this issue will be addressed soon to everyone’s satisfaction soon.”
