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Chinese major TCL finds a more conducive business environment in India than in China itself

Huge boost for 'Make in India'

Akshay Narang by Akshay Narang
9 January 2020
in Trending
India, China, TCL
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In what comes as a huge impetus to Modi government’s flagship “Make in India” scheme, China’s TCL, one of the world’s biggest television makers has decided to make its upcoming Tirupati factory, a global manufacturing hub, even as the company plans to export the “Made in India” televisions to the United States. 

Mike Chen, India country manager for TCL, told TOI, “The manufacturing costs in India are very attractive, and are even cheaper than what we incur in China. The cheap labour cost here is one of the reasons behind the low costing.” 

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The Chinese company currently sources TVs from local contract manufacturers in India, while the high end ones are imported from China. However, the company will gradually start manufacturing TVs in its Indian factory itself which will start production later in the middle of this year. Chen added, “We have invested around Rs 2,200 crore for the facility, and capacities here are higher considering that it will be used for meeting demand in other countries also.” 

The development comes as a major shot in the arm for Modi government’s flagship “Make in India” scheme, especially when it comes to the electronics sector. Ravi Shankar Prasad, Union Electronics and IT Minister had recently said, “We want India to be a strong manufacturing hub for electronics, and for telecom equipment.” Modi government’s efforts at pushing and encouraging the manufacturing of electronics in India, therefore, seems to be paying off in a big way. 

This development becomes that much more significant because it comes amid the ongoing trade war between the US and China. Modi government is hopeful of wooing companies that are looking to exit China in the background of the trade war between the two biggest economies of the world. Union Finance Minister, Nirmala Sitharaman had recently said, said, “I will go back and design in some way whereby I will identify those multinational corporations, American, European or British origin, who are moving out of China or who probably are even contemplating. I will make a blueprint with which I will approach them and put forward to them as to why India is a far more preferable destination.”

Now, with China’s TCL deciding to make its Indian factory a global manufacturing hub, there are clear indications of even Chinese companies trying to escape the trade war. This is bound to bolster the Modi government’s ambitions of making the most of the US-China trade war. 

The Indian market is tailor-made for companies exiting China. The juicy Indian market characterised by low manufacturing costs, especially in terms of cheap labour makes it a very attractive option. As such India is the closest substitute to China for the Chinese companies looking to develop fresh manufacturing locations in order to avoid US sanctions and adverse duties in their home location. 

Last year, India had also announced a major corporate tax cut and now it seems that the move couldn’t have been timed better, as India seems to be perfectly placed for making major gains out of the US-China trade war. 

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