“Foxconn’s collaboration with Indian firms may yield cost-effective products, boosting global competitiveness. However it poses challenges for local companies as the increased competition and pricing pressure may emerge due to economies of scale,” Rawat stated.
“Foxconn's expansion in India poses a significant challenge to Tata Group, sparking intensified competition in contracts, market share, and skilled labour. This may strain Tata's profit margins, prompting strategic adjustments,” the semiconductor analyst said while highlighting the challenges Tata Group might face due to increased investment of Foxconn.
“To stay competitive, Tata must invest funds in technological innovation, automation, and product development. Navigating regulatory environments, building government relations, and adapting marketing strategies is imperative. Tata must seriously consider geopolitical issues, such as trade disputes, arising from Foxconn's development in this global economic environment,” Rawat opined.
“On the one hand, it brings opportunities such as job creation and economic growth, but on the other hand, it poses challenges for Indian companies, leading them to explore alternatives like Vietnam due to heightened competition for resources,” he said adding that concerns about regulatory impact, market dynamics, and supply chain resilience may drive domestic companies to consider other markets.
“Along with infrastructural expenditures, streamlining bureaucratic procedures and cutting red tape are essential for increasing the ease of doing business. Tax measures that are favourable to investors, such as reducing corporation taxes, are crucial to improving India's appeal. A competitive workforce necessitates a focus on education and skill development, particularly in fields that need specialized knowledge,” the expert stated.
“To develop a complete plan for economic growth, other important strategies include encouraging foreign direct investment, sector-specific legislation, global trade alliances, financial incentives, improving corporate governance, and supporting small and medium-sized businesses,” Rawat said.