Economic Times: October, 2016
New Delhi: Holitech Technology, a maker of LCD and touchscreen panels used in mobile phones, plans to invest $1billion in India by next year, a top company executive said. The announcement comes at a time when states like Haryana, Uttar Pradesh and Telangana are vying among themselves to woo Chinese component makers, as local smartphone companies seek suppliers to move up the value chain.
“We are looking at the supply chain here and how mature it is,” said Bingshuang Chen, chief executive of Holitech Technology, adding that the company was waiting for research and development (R&D) expertise to grow in India so it can work directly with handset brands here.
“From our point of view, next year will be best time for us to enter the country…It (investment) could be as big as $1billion considering the requirement of facilities, equipment and all other technical aspects,” he added.
The Jiangxi-based component maker is among the several mobile phone manufacturers and component developers that are part of a high-level investment delegation from China on a sixday India visit till October 26. A similar event was held earlier this year as well, however, investments from component makers are yet to begin.
"If Foxconn has not got its own component makers yet, why would others take the plunge," asked Vishal Tripathi, research director at Gartner India."Indian handset makers are already purchasing components from China, so there needs be a compelling business driver for Chinese component makers to invest heavily locally."
Though Chinese component makers are taking their time to set up shop in India, states like Uttar Pradesh are offering developed land and skilled manpower in and around Greater Noida, to hasten the pace of investment. UP secretary for information technology, Sanjiv Saran said the state will soon begin giving 200% refundable VAT (value-added tax) to companies for building manufacturing units in the state.
“It should be passed in the next Cabinet meeting.” Saran added that UP, which has the largest concentration of mobile assembly units in India, is getting greater interest from Chinese phone makers Vivo and Oppo, both of which have asked for 200 acre of land to build their own campuses. On the other hand, new state Telangana, which is pitching Hyderabad to investors, is offering automatic deemed approval to an investment project within 15 days.
“We have created the most aggressive industrial policy and we have given approval to 2,500 companies in the last 18 months, half of them have started operations,” said Sujai Karampuri, director of Telangana government’s information technology department. Haryana is pitching infrastructure and its past experience to Chinese component investors, on the back of numerous automotive companies that have set up factories over the past few years. Devender Singh, principal secretary of IT and electronics in the Haryana government, is pitching proximity to Delhi airport and the industrial and freight corridors besides single roof clearance as part of ease of doing business for investors.
“We are also offering special incentives for mega projects of more than Rs 100 crore,” he added. Holitech’s Chen said the company’s ODM and handset vendor partners are in touch with state governments for future facilities.