Is Flex shifting its production out of China and considering India?
By MYBRANDBOOK
Flex, the US-based electrical and electronics component manufacturer is planning to expand its business from China to other geographies, including India.
According to available reports, the company is making up its mind to invest about $500 Mn (over INR 3500 Cr) to increase its manufacturing capabilities in India, and also increasing its exports from India to other markets.
The company’s president, Richard Hopkins, according to a Flex senior exec has met with a group of Indian ministers including communications and IT minister Ravi Shankar Prasad last week and discussed the opportunities for the company, to shift its production out of China.
In the same meeting, Flex had also stated that it would leave India for Malaysia, provided the government comes up with suitable incentives to attract electronics component manufacturers.
The decision comes at a time when the China-US trade war continues to affect US-based companies in China, and vice versa. This trade war, in a way, is attracting global manufacturers to look at countries like India, Malaysia and Vietnam and others, to further expand their business.
It is high time however for India, according to a lot of experts, to take a quick decision and come up with a policy to compete with Vietnam and Malaysia in a bid to position itself as a global manufacturing hub.
According to the media report from TOI, the World Trade Organization had also found India’s export incentive schemes incompatible with the merchandise export from India scheme on subsidies and other measures. The verdict was passed and, India was asked to re-work on its incentive schemes to comply with international companies, as soon as possible.
India’s IT minister, Prasad reportedly said that the government is aiming to make India a major export hub of electronics manufacturing. He further stated that the country has increased the production of electronics from $29 Bn in value terms to $70 Bn in 2019. Also, India being the second biggest manufacturer of smartphones in the world, the country has 282 mobile factories as compared to just two factories in 2014, he added.
Flex runs 11 facilities across Chennai, Hyderabad, Gurugram, Bengaluru and Visakhapatnam. With a team of 25,000 people in India, the company plans to increase exports out of India to approximately $12 Bn in the next 12-18 months, the report added.
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