INSUBCONTINENT EXCLUSIVE:
smartphone industry expand, fuel research and development (R-D) investment and attract higher-value component makers to the world's
unemployment has surged as growth sinks to six-year lows.The country is currently vying with rivals like Vietnam to attract global firms
such as Apple and encourage contract manufacturers like Foxconn and Wistron to step up their presence
China's trade tussle with the United States, which is pushing smartphone makers to seek alternative markets, is giving that fight an
additional edge."This is a clear signal from the government to boost investors' confidence in India's economy," said Vikas Agarwal, India
head of China's OnePlus, which makes its smartphones locally and rivals Apple for a share of country's premium device segment."It will
directly affect a company's profitability, help fuel consumption -- but more importantly it also reflects India's ambitions."The trade
war between Beijing and Washington has led to higher tariffs on goods worth tens of billions of dollars and disrupted global supply chains,
pushing companies to look at newer markets to escape higher tariffs.And India has already begun stepping up efforts to attract investment,
especially in labour-intensive electronics manufacturing.Government last week scrapped a tax on imports of open cell TV panels, used to make
television displays, in a move likely to boost television manufacturing in the country.INVESTING IN INDIAThe arrival of global players has
made India the world's No
2 mobile phone maker and the smartphone industry is central to Prime Minister Narendra Modi's ambitious "Make in India" drive.Friday's
the South Asian country, such as Taiwan's Pegatron and other firms which make higher-end electronics components.The four senior smartphone
industry executives said it was too early to speculate about how much more money their companies would commit to investing following the tax
cut.But smartphone maker Lava and China's Xiaomi said the cut would help them generate more employment and step up investments in local
R-D."We are hopeful that we will be able to bring more of our component suppliers to India and help boost the local manufacturing industry
further," said a spokeswoman for Beijing-based Xiaomi, India's top smartphone player.It makes 99 per cent of its devices locally through
contract manufacturers and recently helped its supplier Holitech -- a maker of camera modules and other parts -- to set up a plant in
northern India.The tax cut will help draw makers of components like phone display panels, lithium cells and camera modules, industry
executives and analysts said, also citing a jump for India in a global index that ranks countries by ease of doing business."Earlier,
India's corporate tax rate was among the highest in the world
The new tax rate brings it at par with other leading manufacturing economies such as the United States and China," said one of the
smartphone industry executives, who asked not to be named due to company policy
"The central bank now needs to cut lending rates by 75-100 basis points to fuel growth."While it is hard to calculate the benefits for
individual companies, the lower tax rate will mean better profit margins for companies such as Apple and OnePlus which sell high-value
phones, Rushabh Doshi of technology research firm Canalys said.Executives warn, however, that investors remain wary of India's policy
flip-flops, red tape, poor logistics infrastructure and cumbersome land-acquisition procedures."Right now is the window of opportunity for
India to come up with as many incentives as possible to draw attention," Shih-Chung Liu, vice chairman of Taiwan's External Trade
Development Council, told Reuters."This is a good start, but it is just one major incentive."Get Breaking news, live coverage, and Latest
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