India to Contribute 40% to South Asian Business, says Regional President for South Asia and Korea of Avnet

By: Asia Business Outlook Team | Wednesday, 23 August 2023

India stands to benefit from the exit strategy of many multinational corporations from China. However, according to Tan Aik Hoon, regional president for South Asia and Korea at global electronic components distributor Avnet, it is not yet at the same level as peers such as Vietnam, Thailand, and Malaysia.

"Today, India accounts for 20% of our South Asian business, and I don't see why it can't grow to 25%-30%." In the long run, it should be around 35-40%," Aik Hoon said during a media interaction in Bengaluru on August 22.

What holds India back is a lack of global electronic manufacturing service (EMS) firms in the country. Many of the EMS companies are present in countries like Thailand, Malaysia and Vietnam, she explained.

"These are the countries that began 25 years ago." We've started it, and we need to be patient because these things don't happen overnight," said Suresh Kamath, managing director for India at Avnet, a Fortune 500 company.

The China Plus One strategy is a business move to diversify companies' manufacturing and sourcing operations outside of China in order to reduce reliance on the East Asian giant.

The company is optimistic about its future plans in India, owing to a growing semiconductor industry, government policies encouraging indigenous manufacturing, and a developing ecosystem.

According to Kamath, India can reap benefits in the manufacturing sector within the next 3-5 years.