Following the power outrages faced by China, India, the world’s third largest economy, is facing the same issue as well: with coal-fired plants accounting for 70% of India’s power source, it has been revealed that the country’s coal stocks can only power its 135 coal plants for less than three days. The shortage can be attributed to various reasons, including a surge of international coal prices, a temporary slump of domestic coal output, and a rebounding post-pandemic economy.
India’s energy minister stated that the country would avert a “China-like” situation, but the latest development has unnerved the electronics supply chain based in India, especially the Taiwanese contract manufacturers supplying Apple, such as Foxconn Technology Group, Wistron Corp., and Pegatron Corp. These companies also suffered when India experienced a Covid-19 resurgence in May 2021.
As part of a global effort to diversify supply chains as well as lowering production costs, companies like Apple and Amazon have pivoted their supply chains away from China, prompting their Taiwanese suppliers to set up production sites there. The volatility of Sino-American trade relations are also a driving force.
Delta Electronics, the world’s largest industrial power supplier whose products can be found among EV charging stations as well as servers, is among the Taiwanese companies seeking to boost its presence in India. It reportedly aims to cut its China-based labor force by 90%, replacing them with automation. Last year, Foxconn, the world’s largest electronics contract manufacturer, also planned to invest US$1 billion in India, where it would make Apple’s latest iPhones. It is estimated that approximately 65-70% of iPhone 13 are supplied by the Taiwanese manufacturer.
Even though none of the major Taiwanese manufacturers have experienced any issue with power outrages so far, an air of uncertainty still reigns, especially when India’s unstable power supplies have been a frequent issue for Taiwanese companies. Delta Electronics states that it is closely following the development, while Foxlink, a major Apple cable supplier and closely linked with Foxconn, reported that its Indian manufacturing sites often experienced power disruptions without production impacts.
It remains to bee seen how India plans to address the challenge in the long term, as the US and even Europe have eyed the subcontinent as a crucial place in their respective Indo-Pacific strategies.