suppliers, and local tycoons will claim a share of benefits worth as much as $27 billion. The enthusiasm for Prime Minister Narendra Modi’s gambit to spur production is striking after years of false starts to find India space on the world’s factory floor.
The new “Production-Linked Incentive” scheme attempts to compensate for those costly inefficiencies. New Delhi approved the first set of local and foreign applicants in October for electronics and is busy expanding the initiative to new sectors. Beijing can wreak economic havoc in India. Shipments get delayed in retaliation when border tensions flare up, and the risk of disruption is growing. Imported components - where China is a top supplier – account for about 80% of India’s local demand for IT hardware, solar panels, and telecom network kit; 40% of its consumption of pharmaceutical ingredients, and more than one fifth of its consumption of alloy steel and auto components, per Enam Asset Management.