India’s lower corporate tax rate will help its smartphone industry expand, fuel research and development (R&D) investment and attract higher-value component makers to the world’s second-biggest smartphone market, four top industry executives said.
India slashed its headline corporate tax rate to 22% from 30% on Friday in a surprise gambit aimed at wooing manufacturers and boosting investment in Asia’s third-biggest economy, where unemployment has surged as growth sinks to six-year lows.
The country is currently vying with rivals like Vietnam to attract global firms such as Apple and encourage contract manufacturers like Foxconn and Wistron to step up their presence. China’s trade tussle with the United States, which is pushing smartphone makers to seek alternative markets, is giving that fight an additional edge.
Friday’s announcement also cut taxes for any manufacturing firm incorporated on or after Oct. 1 and beginning production by March 2023 to an even lower rate of 17% — less than rival countries.
That should help charm contract manufacturers that do not already have a presence in the South Asian country, such as Taiwan’s Pegatron and other firms which make higher-end electronics components.
MacDailyNews Take: More impetus for China to work out a trade deal with the U.S sooner than later.