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A $10 billion push to make semiconductors in India is on shaky ground.
Its collapse will expose a major fault line in Prime Minister Narendra Modi<\/a>’s campaign for greater economic self-reliance.
Already, influential critics are asking if the much-touted success in becoming a hub for smartphone manufacturing<\/a> is a hollow claim. Low-end assembly-line jobs, created with the help of expensive state subsidies and protectionist import duties, would only make sense if they were a quick pathway to more sophisticated production, such as of microprocessors.
To that end, a likely rejection by the government of incentives for the 28-nanometer chip unit proposed by Indian billionaire Anil Agarwal’s Vedanta<\/a> Resources Ltd<\/a>. and Taiwan’s Hon Hai Precision Industry Co., also known as Foxconn<\/a>, is not a good look.
Neither of the two collaborators has significant chipmaking experience, and the project is yet to find a technology partner or license manufacturing-grade technology, Bloomberg News reported this week, citing people familiar with the matter. New Delhi has pledged to pay half the cost of setting up semiconductor units, but only when at least one of those two conditions are met.
It isn’t just the Vedanta-Foxconn project that has hit a rough patch. A $3 billion proposal that had Israeli foundry Tower Semiconductor Ltd<\/a>. as a tech partner has also stalled, while a third plan is stuck because Singapore-based IGSS Ventures Pte wants to resubmit its application for incentives, Reuters reported this week. With that, state-assisted chipmaking may be back to the drawing board.
Maybe Vedanta<\/a> will reapply when the junk-rated miner has figured out what to do about its record $2 billion bonds coming due next year. Tower might be waiting for Intel Corp. to finish acquiring it before reentering the race. Or perhaps newer claimants will emerge. The Mumbai-based conglomerate Tata Group<\/a>, which may soon become the fourth contract manufacturer for iPhones, also harbors chipmaking ambitions, Chairman Natarajan Chandrasekaran told Nikkei Asia in December.
Although the Covid-19 disruptions finally convinced widget makers of the virtues of a “China+1” strategy, bureaucrats in New Delhi were viewing the deepening chasm between Beijing and Washington as a once-in-a-generation opportunity even before the pandemic. But instead of focusing attention on making a 400-million-plus workforce more productive, the Modi government decided to emulate the Trump administration’s jingoistic approach to trade. In 2018, it announced a “calibrated departure” from a two-decade-old policy of reducing protectionism and raised import duties on mobile phones to 20% from 15%. The 2019 electronics policy adopted net positive balance of payments as one of its goals.
Then, just as the country was about to exit its pandemic lockdown, Modi came up with the slogan of self-reliance. A five-year, $24 billion subsidy, known as Production Linked Incentives, or PLIs, was conceived. The idea was to select a handful of investors and coax them to manufacture locally across industries such as electronics, electric-vehicle batteries, solar panels and textiles. Risk takers were to be compensated for the economy’s underlying lack of competitiveness with handouts as well as import protection. By 2020, a quarter of India’s tariff lines were higher than 15%. That’s double the figure from a decade earlier.
The “Make in India” campaign appears to have worked for mobile phones. From being a net importer to the tune of $3.3 billion five years ago, the most-populous nation is now a net exporter. The difference between what it now garners from selling phones to the rest of the world and what it spends on buying them from China is a cool $9.8 billion.
Still, those numbers hide more than they reveal. As Raghuram Rajan, a former Reserve Bank of India<\/a> governor, showed in a recent paper with two coauthors, instead of ready-made mobile phones, India now imports components. When you add major parts like semiconductors, printed circuit boards, displays, cameras and batteries, the country is a bigger net importer than before. It’s now spending a net $21 billion. (Or a portion thereof, assuming that some of the imported components may be used to make things other than mobile phones.) “In other words, it is entirely possible that we have become more dependent on imports during the PLI scheme,” the researchers say.
On each phone assembled locally, the government pays the likes of Foxconn and Wistron Corp., another Taiwanese contract manufacturer for Apple Inc., up to 6% of the invoice price. In the absence of data, Rajan and his colleagues wonder if the handout, coupled with other subsidies, actually outweighs the value added.
It’s an important question. The emerging consensus in policy-advisory circles is that in a decade the nation will go on to capture about 20% of the final price of a device. That’s optimistic, considering that China garnered $6.5 on the first iPhone in 2009. It took the People’s Republic nearly a decade to raise its take to $104, or 10% of the final price of iPhone X, economist Yuqing Xing has estimated.
But if five years of high tariff walls and nearly three years of subsidies haven’t encouraged indigenous production of simple parts, how will handouts help with more complex manufacturing?
Maybe it’s just as well that Agarwal, who boasted of creating “a self-reliant Silicon Valley” in Modi’s home state of Gujarat, couldn’t find a technology partner in nine months, or that Hyundai Global Motors, selected for a battery subsidy, turned out to be a case of mistaken identity — it had nothing to do with the South Korean carmaker. It’s time to pause and weigh if the PLI program is as successful as it’s cracked up to be. With even private-equity swashbucklers turning cautious about startups spending $1 on customer discounts to buy $1 in revenue and $2 in losses, it makes no sense to be hasty about wasting taxpayers’ billions.
Disclaimer: The opinions expressed in this article are that of the writer. The facts and opinions expressed here do not reflect the views of The Economic Times.<\/em>
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莫迪的240亿美元制造推动困在生产线
有影响力的评论家已经在问宣扬的成功成为智能手机制造业的中心是一个中空的说法。低端的流水线工作,创建的帮助下昂贵的国家补贴和保护主义的进口关税,只会是有意义的,如果他们是一个快速的途径更复杂的生产,如微处理器。
在印度100亿美元推动制造半导体是站不住脚的。
它的崩溃将暴露的主要断层线的总理莫迪争取更大的经济自立。
有影响力的评论家已经在问宣扬的成功成为中心智能手机制造是一个中空的说法。低端的流水线工作,创建的帮助下昂贵的国家补贴和保护主义的进口关税,只会是有意义的,如果他们是一个快速的途径更复杂的生产,如微处理器。
为此,政府可能拒绝的激励胡伟武芯片单元由印度亿万富翁阿尼尔•阿加瓦尔提出的吠檀多 资源有限公司。和台湾的鸿海精密工业股份有限公司,也被称为富士康,不是一个好的外观。
两个合作者都没有显著的芯片生产经验,和项目尚未找到一个技术合作伙伴或许可证manufacturing-grade技术,本周彭博新闻社报道,援引知情人士透露。乐动扑克新德里已承诺支付一半的费用建立半导体单位,但只有当至少满足这两个条件之一。
不仅仅是Vedanta-Foxconn项目遭遇坎坷。30亿美元的提案,以色列的铸造塔半导体有限公司。作为科技伙伴也停滞不前,而第三个计划是卡住了,因为新加坡的igs企业Pte想提交申请奖励,据路透社报道。,一份芯片可能会重新开始。
也许吠檀多将申请当垃圾矿商已经想出如何应对创纪录的20亿美元国债明年到期。塔可能等待英特尔公司完成收购之前重返地球。或者更新的申请人将会出现。孟买集团塔塔集团,这可能很快成为iphone的第四合同制造商,芯片也怀有野心,主席Natarajan Chandrasekaran告诉日经亚洲12月。
虽然Covid-19中断最后说服小部件制造商的美德“中国+ 1”战略,官员在新德里查看北京和华盛顿之间的鸿沟加深个千载难逢的机会中——甚至在大流行。而是关注关注4亿多劳动力更有效率,莫迪政府决定效仿胜过政府的强硬外交政策的贸易方式。在2018年,它宣布了一项“校准”已长达20年之久的减少贸易保护主义政策,提高了手机的进口关税从20%降至15%。2019年电子产品政策采用净积极的国际收支作为其目标之一。
然后,就像这个国家即将退出流行的封锁,莫迪想出了自力更生的口号。一份5年期、价值240亿美元的补贴,称为生产与激励,或刺,构思。想法是选择少数的投资者和诱导在当地制造行业,如电子产品、电动汽车电池、太阳能电池板和纺织品。冒险者被补偿经济的潜在缺乏竞争力与救济以及进口保护。到2020年,四分之一的印度的关税额度均高于15%。这是图从十年前的两倍。
印度的“让”活动似乎已经为手机工作。从一个净进口国五年前的33亿美元,现在最多的国家是净出口国。之间的区别是什么现在所受的手机卖给世界上的其他国家购买来自中国的开支是98亿美元。
尽管如此,这些数字掩盖超过它们揭示。作为前拉詹(Raghuram Rajan)印度储备银行州长,在最近的一篇论文显示两个合作者,而不是现成的手机,印度现在进口组件。当你把主要部分如半导体,印刷电路板,显示器、相机和电池,比以前更大的净进口国。现在净支出210亿美元。(或其中的一部分,假设的一些进口部件可以用来使事情除了手机)。”换句话说,我们完全有可能变得更加依赖进口PLI计划期间,”研究人员说。
在每个本地手机组装,政府支付富士康和纬创资通公司,苹果(aapl . o:行情)的另一个台湾合同制造商,高达6%的发票价格。在缺乏数据,Rajan和他的同事们想知道讲义,再加上其他补贴,实际上超过了附加值。
这是一个重要的问题。政策咨询领域的共识是,十年来这个国家将继续捕捉设备的最终价格的20%左右。这就是乐观,考虑到中国在2009年获得6.5美元的第一个iPhone。中华人民共和国花了近十年提高到104美元,或者10%的iPhone X的最终价格,经济学家余庆兴的估计。
但如果五年的高关税壁垒和近三年的补贴没有鼓励本土生产简单的部分,和更复杂的制造将施舍帮助好吗?
也许只是,阿加瓦尔,他们吹嘘的创建“一个自力更生的硅谷”莫迪的古吉拉特邦,找不到九个月技术合作伙伴,或现代全球汽车,选择电池补贴,是抓错了人,无关与韩国汽车制造商。是时候暂停,重量如果PLI项目是成功的。即使私募股权流氓把谨慎创业花费1美元客户折扣购买1美元的收入2美元的损失,是没有意义的轻率地浪费纳税人的数十亿美元。
免责声明:本文中表达的观点的作家。这里的事实和观点并不反映《经济时报》的观点。
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