India Rises as Global Laptop Hub Amid China Shift and US Tariff Fears
India’s PLI 2.0 scheme is attracting global laptop brands to local production as US-China trade tensions spark supply chain realignment.
India Emerges as a New Tech Assembly Titan Amid Global Shifts
Once reliant on China for assembling laptops and IT hardware, global brands are now increasingly eyeing India as a strategic manufacturing alternative. Behind this shift is India’s ambitious ₹17,000 crore Production Linked Incentive (PLI) 2.0 scheme for IT hardware, a policy designed to promote domestic production while reducing foreign dependence.
With trade tensions flaring between the United States and China, and speculation mounting over potential new tariffs under a returning Donald Trump administration, global laptop manufacturers are accelerating their plans to diversify their production lines—and India is reaping the benefits.
Why India Is Suddenly a Magnet for Laptop Manufacturing
India’s PLI 2.0, launched in May 2023, offers financial incentives of around 5% on net incremental sales of locally manufactured laptops, tablets, and servers. To qualify, companies must gradually increase the percentage of domestically sourced components—an effort that not only creates local jobs but also fosters a more resilient supply chain ecosystem.
According to government estimates, the scheme could attract investments totaling ₹3,000 crore (about $360 million), generate ₹3.5 lakh crore (approximately $42 billion) in production output, and create over 47,000 new jobs in the coming years. By December 2024, ₹520 crore had already been invested, with a reported production value of ₹10,000 crore and nearly 4,000 jobs created.
These numbers may be modest in the context of global electronics production, but they signal a definitive move toward positioning India as a viable, scalable alternative to China.
Brands Like ASUS Lead the Way in Local Assembly
ASUS, a prominent global laptop brand, has taken the plunge by launching an assembly line in partnership with VVDN Technologies at their Manesar facility. This decision followed six months of careful planning around scalability and local integration.
“Our commitment to India is very, very strong,” said Dinesh Sharma, Vice President of ASUS’s commercial PC and smartphone systems group. “Cost efficiency and backward integration are critical when you’re shifting your production base.”
According to VVDN’s Senior VP Gourab Basu, their facility now produces one laptop every four minutes, showcasing how quickly India’s assembly lines are adapting to global standards. VVDN is also investing in local manufacturing of critical components like Wi-Fi antennas, camera modules, and memory chips, with plans to expand into printed circuit board (PCB) fabrication.
US-China Tensions Speed Up the Shift
While China still maintains a 4–5% cost advantage in electronics manufacturing, that edge is rapidly narrowing as fears grow over looming tariffs from the US. Though current exemptions allow Chinese IT hardware to enter US markets without extra duties, many companies are preparing for a scenario where that may no longer be the case after the 2024 election cycle.
Indian manufacturers offer an attractive workaround: not just tariff-free access to domestic markets, but eligibility for government contracts requiring up to 50% local content—a perk foreign suppliers can’t access from China.
Challenges on the Road to Export Readiness
Despite the progress, India faces several structural hurdles. Exporting laptops to the US requires strict certification, and India lacks qualified testing labs, forcing brands to ship devices to facilities in Shanghai for approval. This adds time and cost—two barriers that policymakers must address if India hopes to scale its exports meaningfully.
Nonetheless, companies like ASUS are already nudging their global component suppliers to set up operations in India, potentially catalyzing a wave of upstream investments that could further deepen India’s supply chain capabilities.
What This Means for India’s Tech Future
With electronics exports already topping ₹3.25 lakh crore and domestic electronics production surpassing ₹11 lakh crore in 2024, India is clearly climbing the tech manufacturing ladder. If it continues this momentum—while addressing bottlenecks in infrastructure and regulatory alignment—the country could very well become a central node in the global IT hardware supply chain.
As global tensions realign old trade routes and supply chains, India’s blend of market access, economic incentives, and an eager industrial base is making it a formidable player in the high-stakes game of tech manufacturing.
Conclusion: A Strategic Crossroads for Global Tech Giants
India is no longer just a market—it’s becoming a maker. With the PLI 2.0 scheme laying the groundwork, and geopolitical winds blowing in its favor, India is primed to be the next global hotspot for laptop production. For tech brands hedging against uncertainty, betting on India isn’t just strategic—it’s becoming essential.
Disclaimer:
This article is intended for informational purposes only and does not constitute financial, political, or investment advice. All statistics and projections are based on publicly available data and may be subject to change.
source : The Times of India