RBCT Chapter 295 The Curry Flavor of "Made in India"
Chapter 295 The Curry Flavor of "Made in India"
While China and the United States were repeatedly testing each other, a "meeting of the century" was announced in the conference hall of India's Ministry of Electronics and Information Technology.
This conference will fundamentally change the reality of India's lagging manufacturing sector, transforming India into a major power in Southeast Asia and placing it among the world's leading manufacturing and technological nations.
So it wasn't just representatives from mobile phone manufacturers who came; there were also telecom operators, distributors, component suppliers, and industry ministers from several states!
Minister Ravi Poussas walked onto the stage with a broad smile.
He was a well-known reformist in the Singh government, and consistently advocated using policy leverage to stimulate the manufacturing industry.
Today, the plan he spearheaded has finally been implemented, which will also usher in a glorious moment for India. I am happy, I must be happy.
"Dear journalists and related professionals."
The Indian government officially launched the "Make in India" initiative today.
A photo of Prime Minister Singh appeared on the large screen along with the slogan: "Make in India."
A round of applause erupted from the audience, and with a catchy tune playing, many people jumped up.
This showcases the magical spirit unique to India.
Ravi Poussas cleared his throat slightly and began to read out the detailed policy.
His voice wasn't loud, but Rebus listened attentively, carefully noting down every policy that benefited rice.
He had no idea that this was a conspiracy against him, after all, he wasn't the only tech company present; there were also companies like Apple, Samsung, and Nokia...
In their eyes, rice is just a tiny shrimp; is such a lavish targeting really necessary?
As Ravi Poussas began to speak, one proposal after another appeared on Rebus's paper.
Article 1: All mobile phone manufacturers in the Indian market will enjoy a 5% tariff, reduced from the current 12% to 7%.
On this point alone, Lei Jun's smile increased by 50%!
Lei Jun: What 50%? It's clearly 49.99%. One should be more meticulous.
Secondly, the government subsidizes 50 rupees for each mobile phone exported.
Lei Jun didn't seem to care much about this, but many locals were whispering among themselves.
After all, 50 rupees isn't much, but little by little, it adds up. A few million units a year would amount to tens of millions of rupees.
Of course, this was just an extra; the third point immediately brought a huge smile to Lei Jun's face.
For the first 5 years after the factory is established, the corporate income tax will be reduced by 50%, and if the contribution is outstanding, the reduction can be as high as 80%.
The applause grew even louder, and Lei Jun willingly joined in.
India's standard corporate income tax rate is 30%, which is reduced by half to 15%, and if calculated at 80%, it is 6%.
This is like a windfall for rice companies with meager profit margins.
After explaining these favorable policies, Ravi Pushas suddenly changed his tone, and the smile on his face disappeared.
"However, for companies that do not build factories, the tariff will increase by an additional 5%, from 12% to 17%."
The applause from the audience stopped, and the expressions of the executives from Sanson, Nokia, and other companies who had been watching the spectacle immediately changed from excitement to seriousness.
They were just eating melon seeds, how did it turn into this?
However, we really need to consider building a factory now, given the 10% tariff difference between the two sides.
This means that manufacturers in the Indian market have a cost that is 10 percentage points lower than manufacturers outside the market.
For a $200 phone, 10% is a difference of $20.
In India, a price-sensitive market, $20 is enough to sway a user's choice.
If both a Redmi Note and a Transsion Spake Pro sell for $349, and one of them has a $20 higher cost, then a price war is impossible!
"Dear industry professionals, due to our regulatory oversight failures, joint venture brands have squeezed our market out of the water in the past."
They have to pay this price for the sake of our domestic manufacturing companies!
As for the second half, Raymond Lamb was distracted by everything Ravi Pushas said; he was preoccupied with how to build a factory to defend against Carmelo Anthony, the crocodile.
After the meeting, Lei Jun sat in his car.
On the way to the hotel, even on the streets of the capital, the horns of three-wheeled motorcycles were still blaring...
Lin Bin sat next to him, also doing the accounting.
As a co-founder, DaMi is also working hard to expand into the Indian market.
He spent nearly two months of the past three months in India; yes, he has a deeper understanding of the market there than Lei Jun (Ruibus Lei).
"Mr. Lei, the current situation is forcing us to build a factory."
After all, if we don't build a factory and import from China, the cost of the first-generation Redmi will increase by 10%.
The profit margin was already meager; if we didn't build a factory, we'd only earn a few hundred dollars per unit, which is about the same as in China.
However, if we reduce this 10% cost, we can engage in a price war with Transsion and significantly widen the price gap.
We still have hope.
Lei Jun handed the calculator on his phone to Lei Jun.
Lei Jun glanced at it and said that his calculations were about the same as his.
Of course he can figure this out.
The Mi Note used to sell for $320 in India, and its current cost is around $130. However, if you add in channel fees, marketing expenses, and after-sales costs, the net profit per unit is less than $50.
If the tariff increases by 5%, that's $2.5.
Earning less is equivalent to losing money; every unit sold results in a loss. Now, "Sincere King" really has to subsidize the Indian market!
"What if we build a factory?"
After speaking, Lei Jun looked out the window again. He used to ask Lin Bin this question, but now it seemed like he was asking his own heart.
Lin Bin had already picked up the calculator and started calculating. As he pressed each key, the answer was revealed to everyone.
"If we build a factory, tariffs will be reduced by 5%, and with export subsidies and tax incentives, the overall cost can be reduced by about 20%."
At the same selling price, our profit margin can increase by another 20%.
A 20% cost reduction is like a nuclear bomb for the mobile phone industry.
This means that rice in India can not only survive, but thrive.
Profits can be used to lower prices and seize market share, to invest in Google Ads to build a brand, and to build an after-sales network.
In short, I need everything! Everything has to be made with money!
Most importantly, its cost exceeded that of China for the first time, while its results were equally cost-effective.
"Go back to the meeting."
That evening, Lei Jun convened an emergency meeting.
Besides Lin Bin, there were a series of senior executives from China. The only difference was that all the local Indian representatives were excluded from the meeting.
Several people held a cross-border meeting via computer.
As a veteran of the rice supply chain, Zhang Feng has been dealing with suppliers since his freshman year of college and has a thorough understanding of things like production capacity, cost, and logistics.