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India Could Be The Next Global Tech Hub As Companies Leave China: Reports

Apple, Amazon, and Samsung are shifting the production from China to India and Southeast Asia amid the US-China tensions and this could lead to India becoming the next global technology hub, as per a report.

The report was released by Hinrich Foundation based in Asia working to promote sustainable global trade.

The report says that the major friction between the US and China will give India the boost to become a global tech hub benefiting due to the global shift in China’s manufacturing supply chains. This is possible for India if it chooses to address roadblocks like government regulations.

However, to become the next global tech hub India needs to tackle manufacturing bottlenecks like excessive regulations, taxes, and non-coordination between its central and state government levels to attract more investors.

The report further states, “The US-China cold war over technology has instigated the manufacturing supply chains to shift their base to new locations. India seems to be well-positioned to absorb these supply chains.”

Many factors are working in India’s favor. One of the major factors that will work in India’s favor is US President Joe Biden’s call for “China-free” supply chains in certain sectors as well as India’s membership in Quadrilateral Security Dialogue with the US, Australia, and Japan. India is also looking at reducing its own industrial dependence on China.

As per the report, “The new Biden administration in the US will soon introduce a sharp policy change towards China.”

The COVID-19 pandemic is speeding the shift as companies take advantage of India’s new productivity incentive programs, enormous labor base, and rapidly flourishing and growing domestic market for devices and Internet services.

The US wants to make sure that China fails in gaining a permanent advantage in critical technologies and will look at forming a partnership with countries like South Korea, Taiwan, and Japan.

India’s inclusion in the US-led Quadrilateral Security Dialogue (QUAD) along with Japan and Australia could also benefit it. Earlier this month, the leaders of these four nations held their first summit to discuss China’s growing economy. As per reports, India’s ties with QUAD members will act in its favor.

According to the report, tech giants like Apple, Amazon, and Samsung have relied on China heavily for their production needs. However, the companies are now shifting their manufacturing production from China to India and Southeast Asia, further intensified the tensions between the US and China.

Apple and Amazon now view India as the prime location to shift their manufacturing supply. The move is being planned due to the country’s new productivity incentive programs, labor base, and increasing domestic market for devices and internet services.

The report even said, “India’s path to becoming a tech hub would majorly rely on its ability to develop smartphone manufacturing. As China still has an enormous lead in the industry.”

Alex Capri, a Singapore-based researcher who wrote the report said, “Everybody that I talk to in the tech sector is moving stuff out of China.”

 

 

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