Geopolitical tensions between India and China have begun to hit some of Taiwan’s largest technology companies, including Apple Inc. suppliers, and hamper New Delhi’s multifaceted incentive program for electronics production.
According to people familiar with the matter, India was slow to issue visas to Chinese engineers who needed Taiwanese companies to help set up factories in South Asian countries. They also said that India was pressuring companies to choose to make it more difficult for them to obtain employment permits, adding that they did not want to be identified by discussing a personal matter.
The scam, which flows the largest amount of foreign investment in the computer hardware and software sector, could delay Indian Prime Minister Narendra Modi’s plan to attract 30 billion foreign investors from September to six months. Companies are looking to India to diversify their supply chains. Modi has banned hundreds of Chinese apps and slowed down the pace of approving Chinese investment after deadly clashes on the disputed border between the two neighbors left 20 Indian and an unknown number of Chinese soldiers dead.
Last year, iPhone assemblers – Foxconn Technology Group, Pegatron Corporation, and many more, including the Western Corps – pledged $ 1.5 billion to set up mobile phone plants in India to export their products locally, after the Modi government gave them specially designed incentives to make them. The move was also expected to shift the supply line from China to India.
Pankaj Mahindra, chairman of the India Cellular and Electronics Association, said visas are an important asset in expanding domestic production and “the government needs to balance its existing policies with the real and short-term need for technical manpower to set up new factories”. “We are hopeful that soon this issue will be addressed to everyone’s satisfaction.”
As tensions on the Himalayan border with China escalated last summer, New Delhi imposed restrictions on Chinese activities in the country, and increased additional investigations for visas for Chinese businessmen, academics, industry experts and advocacy groups. The measures are similar to those that have long been engaged with arch rivals and neighboring Pakistan.
In addition to delays in issuing visas, the government of India has indicated priority in issuing employment visas to people required to set up production lines imported by companies without issuing business visas to people, people said. Employment visas usually require more paperwork and background checks from the Indian Ministry of Home Affairs and may therefore be a cause of harassment in India. Business visas are also shorter.
Companies have shaken up employment permits because it increases costs. It will also lead to double taxation for engineers and technologists as they remain employed in China by their respective organizations. In addition to experts to monitor the whole process, skilled professionals and experts are also needed to train and guide the machines installed for the first time in the country.
The development came at a time when New Delhi was under pressure to grow in Asia’s third-largest economy, the worst annual contraction since 1952, with millions of people losing jobs and plunged into poverty due to epidemics.
The incentive program for mobile-makers alone envisages the production of smartphones worth Rs 10.5 trillion and exports of Rs 6.5 trillion over the next five years. It has the potential to create more than 800,000 jobs.
Spokesmen for the New Delhi-based Taipei Economic and Cultural Center and the Department of Industry, the Ministry of Home Affairs and the Ministry of Foreign Affairs did not immediately comment. China’s foreign ministry did not immediately respond to a request for comment. Western and Pegatron declined to comment as Foxconn did not respond to an emailed question.
India and China have begun withdrawing their troops from a part of their disputed border after several rounds of military and diplomatic talks. However, the withdrawal of troops from other disputed areas along the unmarked border has not yet taken place.