Business

Why India is losing out to Vietnam in attracting companies quitting China

Published

3 years ago

2022/10/16

BY S VENKAT NARAYAN
Our Special Correspondent

NEW DELHI, October 15: In 2020, Chinese auto and electronics major BYD, Apple’s largest contract manufacturer of iPads, was looking to shift some of its capacity from China to India. But the move was shelved after geopolitical tensions erupted between the two countries, and India introduced stiff foreign direct investment (FDI) rules for Chinese companies.Now, two years on, BYD has just started rolling out iPads from Vietnam. It has invested $268 million to set up a new factory with a capacity to churn out 4.33 million tablets a year.

Vietnam’s gain is India’s loss. The two Asian countries have been aggressively wooing global companies and their suppliers to shift from China. Growing US-China geopolitical tensions and supply chain disruptions due to sudden closures of factories to combat Covid-19 have impelled many tech players to explore other investment destinations.

India has grabbed one jewel in the crown — Apple Inc. Its vendor Foxconn recently started assembling the latest iPhone 14 within a few days of its global launch. And if everything goes according to script under the production-linked incentive (PLI) scheme, India will account for 12 per cent of the global production value of iPhones, which could go up to 20 per cent by FY26.

The PLI scheme, meant primarily to reduce the cost disadvantage between India and Vietnam for making mobiles, offers an incentive of 4-6 per cent on the production value for five years. But sources in the know clarify that Apple Inc is not shifting manufacture of its AirPods to India.All in all, though, Vietnam is way ahead in the game. Apart from grabbing iPads, The New York Times reported that Google is also shifting the assembly of its latest Pixel 7 mobile phones to Vietnam from China. Reports had said India was also in the reckoning.

Hanoi has also bagged Chinese mobile player Xiaomi, which is contract-manufacturing phones with Chinese DBG in Vietnam for exports to Thailand and Malaysia. Microsoft is manufacturing Xbox consoles there. In the non-electronics space, toy maker Lego, which was scouting for a factory to cater to growing Asian demand (it has a factory in China), opted for Vietnam recently where it has committed an investment of $1 billion.

Vietnam’s crowning glory has been Samsung. Since 2008, the Korean chaebol has invested a staggering $19 billion in the country shifting mobile capacity from China. It recently announced an additional $3.3 billion for semiconductors. As much as 50 per cent of its phones are made in Vietnam and 2021 annual exports were $65.5 billion (three times what Apple promised to manufacture in India in FY26).The new battleground for the two countries is in PCs, laptops and tablets as global brands look to hedge against their over-dependence on China: 75 per cent of all laptops are made in that country.

Vietnam’s share in this space might be just 2 per cent (contract-manufacturing for Dell, Amazon and Google, say reports) but it is furiously licensing contract manufacturers to create capacity and become a hub for the world here, too.To this end, Hanoi has signed an agreement with Foxconn recently to invest $300 million to assemble laptops and tablets, and has given permission to Wistron last year to make computers and peripherals. Nikkei reports that Microsoft might start producing its Surface line, including notebooks and desktops computers.

India’s answer to woo laptop (the bulk of which are imported from China), PC and tablet makers has been through a Production-Linked Incentive (PLI) scheme for IT products, which has failed to take off. Only around four of the 14 eligible players, domestic and global, have succeeded in meeting their production targets, and they say incentives (an average of 2 per cent) are too low and only for four years.

The electronics ministry is now reworking the plan to cater better to the requirements of global players, who have shown interest in shifting capacity from China if the incentives are attractive enough.Yet the big challenge that India faces — which Vietnam does not — is in setting up a supply chain, which both in mobile and IT products is dominated by Chinese manufacturers. But India’s Foreign Direct Investment (FDI) policy has effectively barred them through the automatic approval route, meaning Chinese investment proposals require government scrutiny. Even then, few have been granted permission over the past two years.

For instance, 10 per cent of Apple’s top 200 vendors are based in Vietnam but the bulk of them are from China. In India, Apple has around 12 global suppliers but only three of them are Chinese firms who entered before the FDI restrictions were imposed. As companies like Apple take a big jump in production from this year, higher value addition is possible only if their Chinese vendors are allowed in. India wants value addition upped from 15-20 per cent to 35 per cent in the next four years. Hanoi imposes no such restrictions; locational proximity enhances its attractiveness.

Vietnam has two other key advantages — far lower input tariffs than India, and the ability to leverage its plethora of free trade agreements (FTAs) that allow zero duty entry for exports.A preliminary study being undertaken by global companies points out that average most favoured nation tariffs for mobile phones and its supply chain and selected electronics products for 122 products is at around 9.9 per cent in India compared to 5.7 per cent in Vietnam.

The other problem, say companies, is that unlike Vietnam there is constant fear of differing interpretations and wrong classifications, with the revenue department suddenly raising demands or even accusing global players of round tripping. “There is no pre-consultation and advance authorisation like in Vietnam. Once demands have been made, the only way out is litigation,” said a senior executive of a global electronics company.

Critically, Vietnam has also leveraged its FTAs with over 56 economies that have helped suppress tariff barriers and make it a potential supply chain strategic hub. For instance, its recent FTA with the European Union has lifted tariffs on 85 per cent of Vietnamese goods. India, meanwhile, has abstained from the most consequential of FTAs — the Regional Comprehensive Economic Partnership (RCEP).

Of course, India has the advantage of an abundance of skilled labour available at still lower wages. Vietnam’s wage for workers is half of that of China, where rising wages have become a barrier to investment. But India’s worker wages are still a third of that of China, says an executive of a contract manufacturing company. That apart, Vietnam’s much smaller population has a limited number of skilled workers.But most global players say that this one advantage is not enough. Vietnam has much more flexible labour laws that partly neutralise the advantage. Clearly, India will need much more than cheap labour to leverage global corporations’ China Plus-One strategy.

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Business

GREAT 2025–2030: Sri Lanka’s Green ambition meets a grid reality check

Published

7 hours ago

2026/02/7

Thilina Walpola

Sri Lanka’s Renewable Energy Project Development Plan, branded GREAT 2025–2030 (Green Energy Acceleration Targets), reads like a confident pivot toward a cleaner, cheaper power system. With more than 2,600 MW of new renewable capacity planned—dominated by solar and wind—and a strong push on storage and grid stabilisation, the strategy signals intent. Yet beneath the headline numbers lies a harder business truth: generation is racing ahead of the grid, and unless infrastructure and control catch up fast, value will leak from an otherwise compelling transition.

At the core of GREAT is scale. Solar leads with 1,571 MW across multiple zones, while wind contributes 1,004 MW, primarily from Mannar, Kilinochchi and the North-Western belt.

Smaller but steady additions are planned in mini-hydro (51 MW) and biomass (38 MW). On paper, the mix lowers marginal costs, cuts imports, and insulates the economy from fuel price shocks—outcomes financiers and policymakers both welcome.

But a senior retired electrical engineer, who spent decades inside Sri Lanka’s power system, cautions that capacity alone doesn’t create reliability—or returns.

“We are adding megawatts faster than we are adding visibility and control,” he said. “Rooftop solar has already exceeded 1,350 MW, much of it invisible to operators. From a grid perspective, that is unmanaged generation, and unmanaged generation is risk.”

The business implications are immediate. Transmission bottlenecks, particularly delays in 220 kV and 400 kV lines, are constraining renewable evacuation. Projects commissioned on time can still face curtailment, eroding project IRRs and shaking investor confidence.

At the same time, electricity demand has softened amid economic pressures, compressing the system’s ability to absorb intermittent power—especially on Sundays and holidays, when demand dips but solar output peaks.

“Low demand days are now the stress test,” the engineer noted. “Without storage and grid-forming assets, you’re forced to back down renewables or keep thermal units running for stability. Both options cost money.”

GREAT attempts to address this with 650 MW / 2,250 MWh of Battery Energy Storage Systems (BESS) and 600 MW of pumped storage at Maha Oya by 2034, alongside synchronous condensers to maintain inertia. These are not optional add-ons; they are value enablers. Storage smooths volatility, captures excess midday solar, and shifts energy to peak hours—turning stranded electrons into bankable revenue.

Yet timing matters. Storage, controls, and transmission must arrive before or with new generation. Otherwise, developers face curtailment risk, lenders price in uncertainty, and tariffs fail to fall as promised.

The plan’s institutional fixes are equally commercial. A Renewable Energy Control Desk (from 2026), Distribution Control Centers in high rooftop solar areas, smart meter mandates, and grid digitalisation are designed to restore operational visibility. Time-of-use tariffs, paired with daytime EV charging and industrial load-shifting, aim to reshape demand—turning a system problem into a market opportunity.

“Tariffs are signals,” the engineer said. “If you want power used at noon, price it right. If EVs and factories move load to the day, solar becomes an asset, not a headache.”

For investors, the message is nuanced but clear. Sri Lanka’s renewable pipeline is real and sizeable.

The policy direction favours clean energy, and the cost curve is attractive. However, project bankability will increasingly hinge on grid-readiness—access to storage, firm evacuation paths, and participation in smart, controllable networks.

For policymakers, GREAT’s success will be measured not by megawatts announced, but by megawatt-hours delivered reliably and profitably. Accelerating transmission approvals, fast-tracking BESS procurement, and enforcing smart metering for distributed generation are the difference between a virtuous transition and a congested one.

“The transition is inevitable,” the engineer concluded.

“The question is whether we do it cheaply and safely, or pay twice—once for generation, and again for the fixes we delayed.”

GREAT 2025–2030 sets Sri Lanka on the right path. The business case now depends on execution—where grids, markets, and management must move at the same speed as ambition, he added.

By Ifham Nizam

Business

Zone24x7 enters 2026 with strong momentum, reinforcing its role as an enterprise AI and automation partner

Published

8 hours ago

2026/02/7

Thilina Walpola

Zone24x7 team

Zone24x7 concluded 2025 with significant industry recognition, securing seven awards across three leading technology competitions—marking one of the strongest years in the company’s 22-year journey. The awards recognized the Industrial Vending Machine solution developed for a client in Australia. It earned both national and regional honors, including Second Runner-up at the Asia Pacific ICT Alliance (APICTA) Awards 2025.

More than accolades, the recognition showcases Zone24x7’s ability to deliver practical, enterprise-ready solutions that create measurable business impact. Competing against leading technology companies across the Asia Pacific region, the wins highlight the company’s growing global footprint and its focus on translating innovation into operational value for customers.

Neschae Fernando, CEO of Zone24x7

Zone24x7’s award run began at the SLASSCOM National Ingenuity Awards 2025, where the company secured National Winner for Best Innovative Product in Manufacturing, National 1st Runner-up for Best Innovative Product (General), and two Provincial Winner titles in the Western Province. This success continued at the National ICT Awards (NBQSA 2025), with Gold in Manufacturing, Engineering & Construction, and the IoT Technology of the Year Award.

“2025 validated our approach of building technology around real business needs,” said Neschae Fernando, CEO of Zone24x7. “As we move into 2026, our focus is on helping enterprises improve productivity, visibility, and decision-making by applying AI, automation, and connected systems in ways that go far beyond standalone tools or chat-based solutions.”

Headquartered in the United States with a world-class technology hub in Sri Lanka, Zone24x7 serves over 50 enterprise customers across multiple industries. The company specializes in integrating artificial intelligence, IoT, and enterprise platforms to solve complex operational challenges at scale.

Its portfolio includes Generative AI capabilities that enhance workflows, system intelligence, and human productivity; AI-powered automation platforms that connect digital and physical data sources; and a Cognitive Vision Analytics Platform that delivers real-time insights from video and image data. In addition, Zone24x7 provides RFID-enabled solutions and Warehouse Management Systems that improve inventory accuracy, asset visibility, and supply chain performance.

“The value we bring lies in how we combine hardware, software, and AI into cohesive solutions that fit seamlessly into existing enterprise environments,” said Vipula Liyanaarachchi, General Manager at Zone24x7. “As organisations look ahead to 2026, we are focused on helping them scale efficiently, modernise operations, and unlock greater value from their data without disruption.”

The award-winning Industrial Vending Machine reflects this approach, integrating IoT hardware, intelligent software, and analytics to automate inventory control and enhance efficiency in manufacturing and industrial settings. Rather than being a standalone product, it demonstrates how Zone24x7 partners with clients to design solutions aligned to specific operational goals.

With more than two decades of experience and a strong research and development foundation, Zone24x7 is now investing further in advanced AI-driven automation, intelligent analytics, and system-agnostic architectures. As businesses navigate rapid technological change, the company is positioning itself as a long-term partner—helping enterprises adopt AI responsibly, enhance workforce productivity, and build resilient operations into 2026 and beyond.

Business

India’s Mazagon Dock Shipbuilders makes mandatory offer to buy remaining shares of Colombo Dockyard

Published

8 hours ago

2026/02/7

Thilina Walpola

India’s Mazagon Dock Shipbuilders Limited has made a mandatory offer to buy the remaining shares of Colombo Dockyard at Rs 40 each, following a 41.73 percent stake acquisition last month.The mandatory offer targets 58.27 percent of the company.

At the recent rights issue, Mazagon Dock Shipbuilders bought 164,916,229 ordinary shares of Colombo Dockyard from the unsubscribed rights entitlement of previous stakeholder Onomichi Dockyard Company.

Mazagon paid Rs 40 per share amounting to a total Rs 6,596,649,160 .

Both indices moved upwards. The All Share Price Index went up by 67.5 points, while the S and P SL20 rose by 23.57 points. Turnover stood at Rs 9.1 billion with 16 crossings.

Top seven crossings were reported as follows: Commercial Bank 9.7 million shares crossed to the tune of Rs 1.2 billion and its shares traded at Rs 224.50, TJ Lanka 14.3 million shares crossed to the tune of Rs 549.7 million; its shares sold at Rs 38.50, Renuka Hotels one million shares crossed to the tune of Rs 250 million; its shares sold at Rs 250, Melstacorp one million shares crossed to the tune of Rs 178 million; its shares fetched Rs 179, Sampath Bank 930,000 shares crossed for Rs 145 million and its shares traded at Rs 150, Sierra Cables two million shares crossed for Rs 74 million; its shares sold at Rs 37 and Lanka Milk Food one million shares crossed for Rs 71 million; its shares fetched Rs 71.

In the retail market companies that mainly contributed to the turnover were; Colombo Dockyard Rs 514 million (3.3 million shares traded), Ceylon Land Equity Rs 349 million (15.6 million shares traded), Sierra Cables Rs 339 million (1.4 million shares traded), Commercial Bank Rs 307 million (1.4 million shares traded), TJ Lanka Rs 247 million (6.5 million shares traded), Luminex Rs 232 million (19.6 million shares traded) and Renuka Foods Rs 180 million (11 million shares traded). During the day 311 million share volumes changed hands in 50661 transactions.

It is said that the market showed mixed reactions. The banking sector actively participated, especially Commercial Bank. The manufacturing sector also performed well.

Yesterday the rupee was quoted at Rs 309.30/40 to the US dollar in the spot market, stronger from Rs 309.45/50 the previous day, while bond yields continued to edge lower on the the mid- to long end of the yield curve, dealers said.

A bond maturing on 15.06.2029 was quoted at 9.45/50 percent.

A bond maturing on 15.09.2029 was quoted at 9.50/55 percent.

A bond maturing on 15.12.2029 was quoted at 9.52/58 percent, down from 9.55/60 percent.

A bond maturing on 01.07.2030 was quoted at 9.68/71 percent.

A bond maturing on 01.10.2032 was quoted at 10.21/24 percent, down from 10.23/25 percent.

A bond maturing on 01.06.2033 was quoted at 10.55/60 percent, down from 10.57/60 percent.

A bond maturing on 15.06.2034 was quoted at 10.77/80 percent.

A bond maturing on 15.06.2035 was quoted at 10.80/86 percent, down from 10.82/87 percent

By Hiran H Senewiratne