The pandemic has triggered so much change that observers of history will refer to a pre-covid era and a post-covid era. We made deft moves with a storm of unicorns, the government fast-tracked incentives to promote indigenization, the ₹76,000 crore semiconductor package will give us design and manufacturing capabilities, and there have been other policies to promote the Make-in-India ecosystem, too.
While on paper, it appears we have all that it takes to seize a bigger share of the global pie, it is important to look at where trade is going lately.
Recent developments such as the war in Ukraine, climate concerns, and the US-China tussle sent some favourable tailwinds for Vietnam, allowing it to emerge as one of the most preferred destinations for electronics. US imports from Vietnam have increased by 33%, with electronics and machinery accounting for the bulk of it.
Hài Phòng grabs spotlight
Hài Phòng, Vietnam’s third largest city, is the country’s new high-tech production centre, with Samsung, Intel, LG, Panasonic, Foxconn, Pegatron, and many others moving there. The port city’s proximity to manufacturing clusters, and a 12-hour expressway to Shenzhen gives it an edge. The country’s electronics industry, today, accounts for about 40% of its exports.
Vietnam has been getting the ball rolling, moving to the Plus 1 space that strategists have been talking of. Its low labour costs, attractive tax incentive policies, location, favourable global trade conditions, and many free trade agreements (FTAs) have worked in its favour. It climbed from the 47th position in global ranking in 2001 to the 10th position in 2020, vis-a-vis exports that make up 1.8% of the total export value of electronics globally. Geopolitics has only helped this trend to gain momentum with manufacturers looking for hardy supply chains.
Read More at https://www.livemint.com/opinion/columns/indias-design-and-manufacturing-capabilities-provide-an-edge-11657479898733.html
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