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    Indian customers check an apple laptop at a store in New Delhi, India, Tuesday, May 17, 2016.

    India to Court Foreign Manufacturers Away From China to Capitalise on Trade War - Reports

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    A trade dispute initiated by the US government on the basis of 'national security' and 'unfair trade' has seen tariffs placed on imports into each respective country, leading to uncertainty from investors, who are now looking at other opportunities to circumnavigate the tariffs.

    Indian officials met on 14 August to establish a list of “target companies” which could potentially look to India as an investment, according to a Reuters report.

    A document reportedly details targeted companies such as Apple, Foxconn and Wistron Corp and plans to encouraging them to shift business away from trade war-hit China and into India.

    Reuters also reported that Taiwan-headquartered manufacturer Pegatron Corp will also be a firm of interest, according to a source.

    The government record of the meeting noted that the firms will be offered a “complete package” that outlines incentives for potential investors.

    “This exercise to start first with Chinese companies based in China and to be completed before 15th of September 2019, including one-on-one meetings,” the document said.

    The document said the government will meet companies from 26 August and 5 September to offer appealing investment zones for their operations.

    Local state governments will also participate in the meetings, as government ministries have received requests to submit their policies to 'Invest India', the national foreign investment promotion agency.

    Nine sectors, including auto, pharmaceutical, electronics and telecoms are outlined as targeted industries to siphon away from their fellow BRICS nation.

    The revelation comes amid a trade war between the two largest economies in the world, which India has been accused as being behind the curve to pick up the slack.

    Richard Rossow, a US-India specialist at the Center for Strategic and International Studies in Washington, said, “There is one other monster country that has a huge domestic market, India, but they have got to get moving” 

    “There is no time to waste in catching that new wave and in fact the question is: Have they already missed it?”

    A worker inspects a motherboard on a factory line at the Foxconn plant in Shenzen on May 26, 2010
    © AFP 2019 / VOISHMEL
    A worker inspects a motherboard on a factory line at the Foxconn plant in Shenzen on May 26, 2010

    China as a manufacturing hub has become a staple economic reality since it's inception in the late 70's.

    However, the trade dispute between the United States and China has resulted in a war of retributive tariffs, disrupting global supply chains.

    The increased uncertainty has led to companies seeking alternative investment opportunities to escape taxes.

    Some companies have begun to shift interest away from China and reorganising production in nations like Vietnam, a top destination, according to industry experts.

    A visitor takes a picture with his mobile phone at the stand of Google on the second day of the Mobile World Congress on February 28, 2017 in Barcelona
    © AFP 2019 / LLUIS GENE
    A visitor takes a picture with his mobile phone at the stand of Google on the second day of the Mobile World Congress on February 28, 2017 in Barcelona

    Google, for example, is shifting production of its Pixel smartphone to Vietnam from China this year.

    Indian executives have begun to present the nation as a preferable destination, particularly as it is world’s second-largest smartphone market 

    According to Reuters, a senior Indian smartphone industry executive said future investment decisions will depend on whether a country can offer policy stability and rapid clearances.

    “Vietnam at the end of the day is a small country and the potential of growing to super-scale, multi-tier supply chain capability is not possible” the executive opined.

    Members of the media and Apple guests get to review the new Apple Watch in the demo room after the Apple event
    © AP Photo / Eric Risberg
    Members of the media and Apple guests get to review the new Apple Watch in the demo room after the Apple event

    Apple has also been significantly hit in the the trade crossfire, seeing 15 percent levies imposed by the US on products made in China, including Apple smartwatches, which begin on 1 September.

    Tariffs will affect the iPhone, which will see additional fees imposed on 15 December.

    While Foxconn and other companies have deepened their India presence, executives such as Apple CEO Tim Cook say that China offers a more skilled workforce, as well as a more organised business environment, which could make it difficult for India to present a preferable alternative.

    This report also comes as India's economy, in line with the US and Europe, has shown signs of a slowdown.

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    trade war, China, economics, manufacturing, BRICS, India
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