Lenovo sets up India plant, Dell suffers from fragmented tariff system
Chinese personal computer maker Lenovo is building a new manufacturing facility in the Indian state of Himanchal Pradesh, a plant that it expects will turn out 2 million units for the growing domestic market, according to a report Friday in the Economic Times.
Lenovo is said to be taking advantage of low duty and excise incentives in the state — the Indian government has granted its northern hill states the ability to give companies preferential tax regulations for the next 10 years.
Interestingly, that's set up a situation where PC makers who have set up manufacturing plants in other parts of the country are at a cost disadvantage. One of Lenovo's rivals, Dell, earlier this year set up a plant in Chennai's special economic zone, a district that is supposed to provide duty relief. But the newspaper reported that when production begins at the Dell plant, its computers will be saddled with 16 percent duties and value added taxes, compared to only 12 percent at the Lenovo plant.
Earlier this year, Dell chief Michael Dell joined the chorus of critics of India's fragmented tariff scenario. Duty and VAT levels can vary drastically between the country's individual states, making production and sales a difficult proposition for large corporations who want to sell product through India.
Lenovo sets up India plant, Dell suffers from fragmented tariff system
