The success of US tech giant like Apple and Korean auto chaebol like Hyundai on Indian turf has prompted the trade ministry to weigh options like pushing for technology transfers and easing tariffs rules to attract more global players to a wider ambit across capital goods, chemicals, and leather.
Such moves are expected to emulate the success India has seen by enhancing its local manufacturing and consequently driving exports of smartphones and automobiles made for foreign brands, a senior ministry official told Moneycontrol.
“The effort of the commerce ministry is how to make our companies part of global value chains. We are working to identify the sectors that can take a lead on this. It comes from our experience in smartphones and automobiles... All top brands are in India in these sectors - be it Apple or Hyundai,” this official said.
Sectors like food processing, leather and textiles too have come up in the initial discussions, thanks to their capacity for employment, while the government is also looking to further the gains made in the spheres of electronics and automobiles. This will catalyse India’s efforts to integrate its domestic companies with the global value chain, the official added.
Discussions on ways to incentivise more global players across these sectors to make in India, which include easing of tariffs, are at a nascent stage and the ministry is presently focussed on shortlisting the sectors. A call to grant such incentives would also hinge on the new US government’s decisions on trade and tariffs with China and other partner countries, pointed out the official.
The commerce ministry is zeroing in on sectors where India could benefit from technology transfer from international companies as well as those that hold higher capacity to create jobs. “A final decision on the new sectors would depend on the capacity for domestic consumption, potential for exports, and where we see a positive response from individual ministries,” said the official.
With the likes of Apple, India has been able to make great strides in increasing localisation. The US major is sourcing iPhones of $15-16 billion annually from the country and is reportedly poised to step up its production to over $30 billion within two years.
India has also been able to ramp up exports of smartphones with top international brands foraying in this segment. This was aided by government initiatives like production-linked incentive schemes and slashing of customs duty.
India's smartphone exports surpassed $2 billion in October 2024, marking the highest monthly total ever recorded, according to data compiled by the Indian Cellular and Electronics Association (ICEA) that was cited by various media reports.
This surge in October was driven largely by a 23 percent jump in Apple iPhones from $1.78 billion in May 2024 and a 70 percent rise from $1.2 billion a year back, ICEA said.
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