In a significant development for India’s #MakeInIndia initiative, Taiwanese laptop giant Asus has unveiled plans to move key component suppliers from its primary manufacturing hub in China to India. This strategic move is set to leverage the Indian government’s revamped Rs 17,000-crore production-linked incentive (PLI) scheme for IT hardware.
With a market valuation of $15 billion, Asus is aiming to aggressively expand its production operations in India, capitalizing on the government’s PLI scheme. This decision aligns with the company’s anticipation of rapid growth in demand within the Indian market, even as China, the United States, and major Western markets face economic slowdowns.
Asus has joined hands with contract manufacturer Flex to establish a new manufacturing facility in Chennai, India. This collaboration is a testament to the company’s commitment to enhancing local production capabilities. The move reflects the growing recognition of India’s potential as a favorable manufacturing destination.
Peter Chang, the general manager for Asus’ Asia Pacific System Business Unit, has expressed the company’s dedication to the Indian market. He stated, “Asus is one of the fastest-growing notebook brands in India, and we will now expand our product line-up and business operations here in line with the growing scale of business as well as market potential.” This reaffirms the company’s confidence in India as a pivotal growth engine for its global operations.
In a major boost to Modi govt's #MakeInIndia initiative, Taiwanese laptop giant Asus has announced plans to relocate key component suppliers from its primary manufacturing hub in China to India – ET pic.twitter.com/jxqwBebaNi
— Megh Updates 🚨™ (@MeghUpdates) September 20, 2023
Presently, Asus sources approximately 80% of its production from China, with the remaining portion originating from Taiwan, Brazil, Europe, and Indonesia. However, with the implementation of the PLI scheme, Asus envisions India emerging as the second or third-largest manufacturing site globally for the company in the coming years.
The decision to relocate key component suppliers to India is expected to have a transformative impact on the Indian electronics manufacturing ecosystem. It is not only a win for Asus but also a boost to the Indian government’s efforts to make the country a global manufacturing hub.
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The revamped PLI scheme for IT hardware introduced by the Indian government has played a pivotal role in attracting global technology giants like Asus to invest in India. Under this scheme, companies are offered financial incentives based on their incremental production of IT hardware. The scheme aims to enhance India’s manufacturing capabilities, generate employment opportunities, and reduce the dependency on imports.
Asus’ move to establish a new manufacturing facility in Chennai is poised to create a ripple effect in the Indian electronics industry. It is expected to bring about significant job opportunities, foster the growth of ancillary industries, and contribute to the overall development of the region. Furthermore, the relocation of key component suppliers to India will streamline the supply chain, reducing lead times and enhancing efficiency.
The decision to diversify manufacturing locations is also a strategic move to mitigate risks associated with overreliance on a single manufacturing hub, in this case, China. This diversification aligns with global trends, as companies seek to create a more resilient and flexible supply chain.
Moreover, Asus’ commitment to expanding its operations in India signifies the company’s recognition of the potential within the Indian market. The demand for laptops and IT hardware in India has been steadily growing, driven by factors such as increased digitalization, remote work, and online education. By bolstering its manufacturing presence in India, Asus is well-positioned to meet this surging demand efficiently.
Asus’ decision to relocate key component suppliers to India is a significant milestone for the #MakeInIndia initiative. It highlights the country’s attractiveness as a manufacturing destination and underscores the impact of government initiatives like the PLI scheme. With Asus’ ambitious expansion plans in India, the country is poised to become a crucial hub in the global electronics manufacturing landscape. This move holds the promise of generating employment, boosting economic growth, and strengthening India’s position as a prominent player in the IT hardware manufacturing sector.
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