Raging pandemic slowing production relocation to India

Ninelu Tu, Taipei; Willis Ke, DIGITIMES Asia 0

Rampant Covid-19 infections across India are generating new variables for electronics supply chain players to relocate production to or enhance investment in the South Asian country.

Many makers have likened India to China of 20 years ago, believing they would have little difficulty replicating their Chinese experience in the South Asian country as long as they could make early deployments there.

But the worsening pandemic in India has complicated the relocation. Industry sources said if virus cannot be contained in India in the short term, it will be difficult to predict the medium- and long-term impacts.

At its recent investors conference, Delta Electronics confirmed infections among employees at its Indian plant, but stressed that the impact was limited as the proportion of its production capacity in India is not large. Other makers with manufacturing operations in India, including Foxconn, Foxlink and Wistron, reportedly are also finding themselves in similar situations, the sources said.

Some makers lamented that as the Indian government has no intentions to enforce lockdowns as part of its COVID-fighting efforts, they can only strengthen anti-virus measures at their plant areas in order to maintain normal production.

The worsening pandemic will not only disrupt production, but will pose even more severe impact on terminal market consumption in India, the sources said.

Many manufacturers have set up plants in India mainly to diversify production bases at the request of clients amid the lingering US-China trade tensions, but the clients apparently are eyeing India's huge market rather than its position as an alternative production base, the sources continued, adding that consumer spending would be significantly undermined if the pandemic continues to rage in the country.