Taiwanese tech giant Asus plans to shift critical component suppliers from China to India as it looks to cash in on India’s manufacturing incentives.

What Happened: The computer and electronics maker is partnering with manufacturer Flex to set up a new plant in Chennai, capitalizing on India’s ₹17,000 crore production-linked incentive (PLI) scheme, the Times of India reported.

With a $15 billion (₹1.25 lakh crore) market valuation, Asus aims to strengthen its Indian manufacturing. The company foresees rising demand in India, even as other major markets face slowdowns.

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“Asus is one of India’s fastest-growing notebook brands, and we’ll expand our product line and business operations to match the market’s potential,” Peter Chang, the general manager for Asus’ Asia Pacific System Business Unit, told the daily.

The Game Plan: Currently, about 80% of Asus’s production is from China. Chang envisions India becoming one of the firm’s top global manufacturing sites, thanks to the PLI scheme.

Asus, initially known for gaming laptops, has diversified its product range and has an 18% share in consumer notebooks.

Chang is confident in India’s PLI scheme, which mandates investments and localization. Asus is actively seeking local suppliers for crucial components like electrical components, memory units, and chassis, both in India and among existing suppliers in China, Taiwan, and Korea.

India’s computer market sold around 10-11 million units last year. Chang believes India can compete with China’s market, which sells 25-30 million units. Asus plans to meet local demand first before considering exports.

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Disclosure: Artificial intelligence was used as a secondary aid in the writing of this story.