The ongoing tension between India and China has hit Taiwan’s biggest technology companies, including suppliers to Apple Inc, as electronics manufacturing activities are getting disrupted.
The delay in issuing visas to Chinese engineers -- needed by the Taiwanese firms to set up factories in the South Asian nation -- is making the scenario more difficult for electronic manufacturing companies, reported Bloomberg. Also, the Indian government had made the issue complex by asking firms to opt for employment permits, which are more difficult to obtain.
Foreign investors who invested $30 billion in the six months to September of 2020 are looking at the Prime Minister Narendra Modi-led government with hope to diversify their chains. The delay in issuing visas and work permits to Chinese engineers may even hurt the government's plan to bolster the country's manufacturing capacity.
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Following the border clashes between the Chinese and Indian Army in 2020, the Ministry of Electronics and IT banned TikTok and 118 more Chinese apps, including PUBG mobile game. The ban was imposed under section 69A of the Information Technology Act after learning that the apps are engaged in activities which are prejudicial to the sovereignty and integrity of India.
Earlier in 2020, firms including iPhone assemblers -- Foxconn Technology Group, Pegatron Corp, and Wistron Corp -- along with many others pledged $1.5 billion to set up mobile-phone plants in the South Asian country as PM Modi assured them specially designed incentives to manufacture their products locally for global export. With this move, the Indian ruling dispensation wanted to make the country a global manufacturing hub for firms planning to shift their base from China.
"Visas are an important resource to help expand domestic manufacturing and the government has to balance its existing policies with the genuine and short-term requirements of technical manpower for setting up new factories. We are hopeful that this issue will be addressed soon to everyone’s satisfaction soon," Bloomberg quoted India Cellular and Electronics Association's chairman Pankaj Mohindroo as saying.
Among other concerning factors, India's insistence on employment visas instead of business visas is creating hindrances for foreign companies. Contrary to business visas, employment visas require more paperwork and background checks from India’s home ministry. Also, this increases the cost for foreign firms.
Apart from the legal and administrative hindrances, hiring or applying for employment visas leads to double taxation for engineers and technicians, as they will continue to be employed by their respective companies in China.
Over the next five years, the Indian government is looking at creating over 800,000 jobs in the smartphones sector, with its incentive programme for mobile-makers alone envisages Rs 10.5 trillion smartphone production and over Rs 6.5 trillion exports.
Meanwhile, after several rounds of military and diplomatic talks, both India and China have begun pulling back their troops from a part of their disputed border. However, disengagement of troops from a few unmarked areas is yet to take place.
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