Cost Doubled, Taiwan Funded Enterprises Shifted To India

The cost of production along the mainland coast has been increasing year by year. With the international brand customers fighting the global foundry type Taiwanese businessmen in recent years, they have already moved to low labor areas such as Vietnam, creating the second production base.

India has become the most popular investment target for Taiwan shoe makers this year after the EU has imposed anti-dumping penalties on the mainland and Vietnam.

According to the China times, it is learnt that the government of the Taiwan Democratic Progressive Party (DPP) has been actively supporting mainland Taiwanese businessmen to turn to India in order to reduce the investment fever in mainland China, taking into account the risks of avoiding putting all eggs on the mainland.

Wu Hebin, director of the Taiwan foreign trade association's office in Chennai, has recently analyzed Taiwanese businessmen who are interested in investing in India, part of the manufacturing industry that traditionally employs a large number of laborers, such as shoemaking, textile and so on, taking India as a factory, while other high-tech and auto manufacturers, following the footsteps of international brand customers, and settled in India, and further driving downstream manufacturers to build new industrial supply chains locally.

In the late 1980s, the footwear industry in Taiwan faced the pressure of the appreciation of the Taiwan dollar and the doubly rising wage and land costs.

Now, Lin Jin Xing, director of the Taiwan footwear trade union, laments that the foreign trade conditions of the mainland's shoemaking have deteriorated year by year. Not only is it short of labor, but also the wages of the workers are much higher than that of Vietnam. Only 2-4 factories have already had to leave the mainland.

Mainland shoemaking businessmen who have visited India have revealed that the number of shoemaking raw materials has increased by about 20% this year, and the production and working conditions of mainland workers have increased by 30%. In addition, the mainland is faced with the threat of US trade quota and the uncertainty of production factors has increased. We must quickly find another production base.

In particular, since the EU has imposed anti-dumping duties on footwear from the mainland and Vietnam, India has taken advantage of the population and is the most demanding country in mainland China.

India's economic growth rate reached 9.3% in the second quarter of this year. McKinsey, an internationally renowned business consultant, pointed out in a report entitled "the bird of gold". If the India government can systematically promote reform plans, curb fiscal deficits and inflation, and actively invest in infrastructure and education, it is expected that the annual compound growth rate of India will reach 7.3% in the 2005-2025 years, and the national income of India will rise three times in the next 20 years. In 2025, India will become the world's fifth largest consumer market.

Despite the fact that India's average national income is not high, the "poor business opportunities" in the local low price market can not be underestimated.

India is now the fastest growing region in the global telecommunications market, growing at the rate of 6 million new mobile subscribers per month.

With the rapid growth of India mobile phone, PC and automobile market demand, international factories have been scrambled to enter the market, and Taiwanese businessmen have provided international customer service for nearby companies. They have followed India to set up factories to invest.

Hon Hai group, the global electronics professional OEM (EMS), moved to India in March last year. Under the name of Foxconn, it was settled in the southern state of TamilNadu (Chennai as its capital), providing customers with vertical integration services such as NOKIA, Motorola and HP. It is estimated that in the next five years, Naitomi Jiyasu will invest more than $1 billion 500 million in India.

Foxconn's first phase mobile phone industrial park in India has been put into production, and the two or three phase of the project is still on the way.

At present, D-Link's D-Link has been ranked the first brand of India's Internet switch. Acer's Acer is also crowded into the top three brands of India personal computers. The rest include TSMC, MediaTek, BenQ, Weisheng, ASUS and so on. More than ten telecom operators set up marketing bases in India to assess the possibility of expanding investment.

With the increase of investment visibility in India business circle, Wu Hebin reminded Taiwanese businessmen, unless they are super large Taiwanese businessmen such as Foxconn. Otherwise, it is difficult for them to go to the India government to get good conditions. It is best to fight group wars in India.