At a time when most businesses have been left dazed in the shape-shifting haze of Donald Trump's tariff policies, two Indian companies have begun preparing new blueprints to cash in on what they believe would be very exciting times ahead, ToI reported on June 4.
The two companies present a striking contrast -- one makes electronics, the other, shoes. Their locations are also divergent, with one headquartered in Chennai and the other situated in the northern part of India. Despite these differences, both companies are racing to expand rapidly in order to capitalise on foreign players looking to penetrate the Indian market, not only for local consumption but also for exports, particularly in light of the tariffs imposed during Trump's administration, ToI's report (by Sidhartha) said.
Another aspect they share is their scale of operations. Dixon Technologies, a supplier of electronic goods, has been actively pursuing partnerships to manufacture smartphones, laptops, and other consumer electronics. The company is experiencing a significant rise in export requests from the United States, as nations aim to decrease their dependency on China.
Chairman Sunil Vachani told ToI, "The Indian market is valued at approximately $40 billion, while the US imports around $80 billion. We anticipate a $100 billion export opportunity in the US and EU over the next few years." He highlighted that while smartphone production has surged, the focus will shift to laptops in the coming years as firms prioritise meeting domestic needs before branching out into exports.
"During the first phase of Trump's administration, we missed the boat because Indian firms were unprepared. However, we have since scaled up and are now designing our own products. We are establishing our presence, and with the development of a robust component ecosystem, we will be on par with Vietnam in a few years," Vachani said.
In Chennai, Aqueel Panaruna, chairman of Florence Shoe Company, is involved in producing one million pairs of sports shoes for a leading global brand. His firm is also collaborating with Hong Fu, the world's second-largest sports shoe manufacturer that produces for Nike and Adidas, to establish a $300 million facility capable of generating 10 million pairs of shoes.
The recent quality control standards in footwear have prompted major international brands to consider increasing production in India, a trend that accelerated following the COVID-19 pandemic, as top names like Nike, Adidas, Puma, and New Balance partnered with local manufacturers to satisfy both global and domestic markets.
For Florence Shoe Company, a significant challenge in the past few years has been the rising reliance on the US market, which now constitutes about 80% of its exports, a stark increase from 25% a decade earlier. The tariffs enacted during Trump's presidency have imposed an extra 10% burden, leading to customs duties on shoes reaching as high as 30%.
Nevertheless, Panaruna remains optimistic. He is counting on upcoming trade agreements with the US, UK, and EU to create further sourcing opportunities from India. "If our partnership with Hong Fu proves successful, we could witness a shift of some factories from Vietnam to India," he mentioned.
Vachani further said, "With the production of displays and camera modules in India, the value addition in mobile devices could increase from 17-18% to around 40% within the next two to three years, approaching China's level of 50-55%."
The two companies present a striking contrast -- one makes electronics, the other, shoes. Their locations are also divergent, with one headquartered in Chennai and the other situated in the northern part of India. Despite these differences, both companies are racing to expand rapidly in order to capitalise on foreign players looking to penetrate the Indian market, not only for local consumption but also for exports, particularly in light of the tariffs imposed during Trump's administration, ToI's report (by Sidhartha) said.
Another aspect they share is their scale of operations. Dixon Technologies, a supplier of electronic goods, has been actively pursuing partnerships to manufacture smartphones, laptops, and other consumer electronics. The company is experiencing a significant rise in export requests from the United States, as nations aim to decrease their dependency on China.
Chairman Sunil Vachani told ToI, "The Indian market is valued at approximately $40 billion, while the US imports around $80 billion. We anticipate a $100 billion export opportunity in the US and EU over the next few years." He highlighted that while smartphone production has surged, the focus will shift to laptops in the coming years as firms prioritise meeting domestic needs before branching out into exports.
"During the first phase of Trump's administration, we missed the boat because Indian firms were unprepared. However, we have since scaled up and are now designing our own products. We are establishing our presence, and with the development of a robust component ecosystem, we will be on par with Vietnam in a few years," Vachani said.
In Chennai, Aqueel Panaruna, chairman of Florence Shoe Company, is involved in producing one million pairs of sports shoes for a leading global brand. His firm is also collaborating with Hong Fu, the world's second-largest sports shoe manufacturer that produces for Nike and Adidas, to establish a $300 million facility capable of generating 10 million pairs of shoes.
The recent quality control standards in footwear have prompted major international brands to consider increasing production in India, a trend that accelerated following the COVID-19 pandemic, as top names like Nike, Adidas, Puma, and New Balance partnered with local manufacturers to satisfy both global and domestic markets.
For Florence Shoe Company, a significant challenge in the past few years has been the rising reliance on the US market, which now constitutes about 80% of its exports, a stark increase from 25% a decade earlier. The tariffs enacted during Trump's presidency have imposed an extra 10% burden, leading to customs duties on shoes reaching as high as 30%.
Nevertheless, Panaruna remains optimistic. He is counting on upcoming trade agreements with the US, UK, and EU to create further sourcing opportunities from India. "If our partnership with Hong Fu proves successful, we could witness a shift of some factories from Vietnam to India," he mentioned.
Vachani further said, "With the production of displays and camera modules in India, the value addition in mobile devices could increase from 17-18% to around 40% within the next two to three years, approaching China's level of 50-55%."
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