IBM and STMicroelectronics are seriously considering to establish independent plants in India, to manufacture mainstream computer and electronic chips. The talks, which are said to be in advanced stage, will entitle a total investment exceeding Rs. 50,000 Crores (US$ 8 Billion).
While STMicroelectronics is considered to be Europe’s largest semiconductor manufacturer, IBM is part of a consortium. Interestingly, these companies are not forming a joint venture in India. They will be investing in separate plants and are willing to put in Rs. 25,000 Crores individually as separate entities.
The Indian Government is expecting a huge influx of Foreign Exchange. Additionally, it is hopeful of getting more components manufactured indigenously. Thus India could save a lot by substituting imported electronic components with those made right here in India. But ironically, the units are expected to get concessions worth nearly Rs 60,000 Crores (US$ 9.8 Billion), spread over 13 years.
A while ago we witnessed how top tech companies were avoiding India and were setting up plants in the Far East or countries like Singapore. Indians are still considered as highly qualified in the tech field. However, companies clearly sideline the country for very rudimentary reasons. India is still incapable of offering assurance of continuous electricity and other amenities, which are absolutely critical. Tech companies have to bear heavy losses even if their operations are interrupted for a few hours owing to substandard support systems.
Looking at the confidence exhibited by these two manufacturing giants, we can hope that Indian Government begins to take efforts, to prove that the country can support the companies with all the amenities. What do you think?