InvestorQ : Why did India lose out on opportunities like Samsung and Apple and what is it that India needs to do to get its exports in shape?
Lavanya Subramanian made post

Why did India lose out on opportunities like Samsung and Apple and what is it that India needs to do to get its exports in shape?

Answer
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Anamika Sodhani answered.
2 weeks ago


Apple is, of course, already in India via Foxconn and it remains to be seen how much of their production shifts to India. But the real case, and it is about Vietnam, is how India lost out the big Samsung action to a tiny country like Vietnam.

Samsung captures the story of what Vietnam did right in the last 10 years. Samsung came to India much before it went to Vietnam as a full-fledged manufacturer. Today, Samsung manufactures goods worth $10 billion in India but its Vietnam production is $66 billion.

Just to give you an idea, Samsung manufactures 50% of its mobile handsets in Vietnam and benefited substantially from the US-China trade war. In the last couple of years, out of 56 companies moving out of India, 26 went to Vietnam and just 8 came to India.

One reason could be taxes. Vietnam offers special tax rates of 10% to 20% for up to 20 years whereas the tax rates in India are at 43.68% for foreign companies. Then there is the port infrastructure, which is a totally different challenge altogether.

We come to the question of what India can do. India has made a big success of IT and automobiles in the last 30 years and that is the model to follow and replicate. India needs to create manufacturing clusters and incentivize to attract foreign players.

Of course, it has got to begin with an overhaul of the port infrastructure and addressing the all important dredging issue. Secondly, tax regime needs to be a lot more business friendly. Finally, India is just not trying hard enough the way other countries in Asia are doing.