Looking South Episode #44 – Taiwanese Companies in India

Eric Gau speaks with Patrick Wu, CDC India Vice President, and Manoj Kriplani, CDC India Project Manager, about their company’s expansion into India.

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Eric Gau: Good morning, and welcome to Looking South on ICRT. I’m Eric Gau, and today we will be looking at Taiwan’s business ties with India. To tell us about that, today we are joined by two guests from Century Development Corporation, who will be sharing their projects there. We have Patrick Wu, CDC India Vice President, and his colleague Manoj Kriplani, CDC India Project Manager. Gentlemen, welcome to the show.

Manoj Kriplani: Thank you very much, Eric.

Patrick Wu: Thank you Eric, this is Patrick.

Eric: Why did CDC set up its first project in India in Bangalore? Have there been some recent changes in the business environment in India that make it more appealing for foreign investors to consider this particular market?

Manoj: Before going to India, we did quite a lot of surveys. We analyzed and we did surveys for a few cities like Delhi, Mumbai, Pune, Hyderabad, and other clusters. Based on our surveys, we found that Bangalore would be our first point, which would be more suitable for all the foreign companies to have their base. The reasons are very prominent, like, Bangalore is already a cosmopolitan city, well known for the IT infrastructure, also known as the Silicon Valley of India. And talent availability. For any foreign company going to India, the major concern is the availability of the skilled labor workforce and the talent availability who can give their services to the foreign companies. Keeping this in mind, the skilled workforce, talent availability, infrastructure, the weather, and the connectivity to other cities, so Bangalore was the first city of our project.

Patrick: Taiwan has quite similar temperature and weather to Bangalore, and everywhere is full of plantations, and we consider it a garden city. For Taiwanese who located their first projects in India, Bangalore seems to be the best choice for everyone.

Eric: In your opinions, why is the India market important to Taiwanese companies?

Manoj: India has already taken the lead in terms of economic growth. The GDP is touching 7.4% now, and the forecast is for next year to be around 8%. So from one side, GDP is growing. On the other side, by 2025, the population will be touching 1.5 billion. The population is not the key, the key is the workforce. Out of this 1.5 billion people, 30 percent of the population will be the young population who that can give their services in this industries. The median age will be around 29 years old. For that, we are targeting the young population. And given the current government is very aggressive about foreign investment coming to India, especially in the manufacturing sector. This is the opportunity in India.

Patrick: If we consider in the future, the next 10, 20 years, where is the major growth globally? India will be that market. Since this is a market less traveled by Taiwanese markets, if we seek the next 10 to 20 years growth globally, then India is the best choice to start with.

Eric: Based on that, how will this project help Taiwanese companies enter the India market?

Manoj: Right now, the central government and different state governments are offering a lot of incentives, in terms of fiscal incentives, subsidies, some exemptions, especially in industries in which Taiwan has strength in, like the IT industry, the electronic manufacturing industry, EMS companies, biotech, other textiles, and machinery. All these sectors are actually under the Make in India initiative, that total 35 sectors have been identified, out of these 35 sectors, 5-6 sectors are Taiwan’s key strength. So looking at these key sectors that Taiwan can get incentives from the state governments and the central governments, there are a lot of incentives to attract these investments into India. Given this, they have the chance to enjoy all these incentives available from the government.

Patrick: We would like to set up this park as the first industrial cluster for Taiwanese particularly. As we see it, if Taiwanese companies want to go to Southeast Asia, those countries they are heading to, all these overseas Chinese have already built up their society, and their social connections are perfect for them. But that is not the scenario in India. So when Taiwanese companies have to come to India to do business, a lot of connections or local knowledge have to be acquired. As I just mentioned, we would like to become the first cluster in India, and we are going to provide all these connections, helping all these Taiwanese companies to set up their operations there. This will be the first step for them to have a soft landing in India as a foreign market.

Manoj: If you talk about the electronics sector in India, there’s a big gap in the demand and supply from the manufacturing viewpoint. 65% of the electronic goods are imported in India, so this shows there’s a huge dependency on imports. To make this gap smaller, the Indian government is targeting to have a local manufacturing base for Taiwanese companies. To attract this, of course they are offering a lot of incentives and fiscal benefits. By 2020, this market will be touching around $400 billion, so you can see the size is very huge. This shows there is a lot of opportunity for mobile phones, flat panel display TVs, notebooks, digital cameras. Taiwan is known for the manufacturing of these products. There is opportunity in India for these kinds of products.

Eric: What industries would you say are the most suitable for your park project?

Manoj: Biotech, medical devices, electronic for automotive also because Bangalore is already a well-developed automotive cluster, with Toyota already being there, Hyundai, and other big Japanese companies around Bangalore.

Eric: What kind of service can a Taiwanese company expect to get from CDC’s TIIP project?

Patrick: We would like to build up this cluster to help all these Taiwanese companies to landing their operations in this park. So, starting from setting up their companies, providing the legal services to them, later on to help them to do the marketing research and recruiting their staff. And later on they might have tax issues to encounter. So we are going to provide all this one-stop service for them, so they will just come here and start up their marketing and doing their manufacturing over our site, they don’t have to worry about all this specific items. So they can have a fast-track to set up their operations.

Manoj: Taiwanese companies know that there is huge potential in the Indian market, but at the same time they are not familiar with the entire business environment there. So to make these things easy, CDC is going to offer what Patrick mentioned, one-stop solutions under one roof, to give them all these consultation services regarding tax structure, how to enter the market, set up the company, and what incentives are available, and other things that are related to the market and industry. So we are going to give the services under our park to all the tenants which are looking to come to India.

Eric: We’ve been chatting with the vice president and project manager of CDC India, Patrick Wu and Manoj Kriplani. Gentlemen, thank you for taking time out of your schedules to join me on the air today.

Manoj and Patrick: Thank you Eric.

Eric: That’s it for this week’s installment of Looking South. I’m Eric Gau, see you again next week.

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