NEW DELHI: Component suppliers of Taiwan's Foxconn are among the major ecosystem players likely to set up shop in India and contribute to the more than $5 billion (Rs 35,500 crore) investment expected in the country over the next two years in high-end electronics manufacturing.“With a rational corporate tax and the impending package to get into robust exports, the investment rationale of not only first tier companies but also component suppliers/manufacturers becomes robust. We will see at least 20 top companies with current revenues of $1 billion plus each entering or re-entering India,” Pankaj Mohindroo, chairman of handset industry body Indian Cellular and Electronic Association ( ICEA ) told ET."With the clearance of a robust package, we should see investment of at least $5 billion in the next two years," said Mohindroo.Last week, the government brought down effective tax rate for companies by about 10 percentage points to 25.17% and offered a reduced rate of 17.01%, including surcharges, for new manufacturing firms, as part of efforts to resuscitate the economy. Rates were lowered from nearly 35% and over 29%, respectively. Separately, a high-powered committee has been set up to suggest measures to boost exports of locally-made electronic products.“The 17% tax rate announcement is mostly to increase the capex driven investments which whereas the rate cut for existing companies is to spur the opex of existing companies,” said Neil Shah, research director of market research firm Counterpoint Technologies Shah added that while the Phased Manufacturing Programme (PMP) aided the industry transition from an overall phone assembly market to PCB (printed circuits board) manufacturing, the tax rate cut announcement would give a fillip to the next phase of building the component manufacturing ecosystem in the country.“Camera modules, display panels, could be manufactured, after being first assembled in India. Investment could start with a few hundred million dollars and could touch up to $3 billion in the next two years,” Shah added.One of the major investors going forward is likely to be Foxconn, the world’s largest contract manufacturer, whose component partners are eyeing India, said a person directly familiar with the matter. The development would coincide with media reports which have cited sources as saying that Apple has directed its suppliers to shift 15-30% of their production from China to other countries amid an escalating trade war with the US."This (tax) news could elicit the interest of Foxconn group companies and suppliers which are looking for investor friendly destinations to set up their manufacturing units," the person said.Foxconn is the biggest manufacturer of iPhones in the world and its India unit is already testing local production of Apple's devices such as the XR for local supplies as well as exports. In fact, Foxconn is already believed to have started exports of some if its devices from India, and, with the latest tax sops, is expected to widen its manufacturing plans further.An email sent to Foxconn was unanswered.The National Policy on Electronics 2019 aims at promoting domestic manufacturing and export in the entire value-chain of ESDM (Electronics System Design and Manufacturing) to achieve a turnover of Rs 26 lakh crore by 2025.This includes targeted production of one billion mobile handsets by 2025, valued at Rs 13 lakh crore, including 600 million mobile handsets valued at Rs 7 lakh crore for exports.Mohindroo added that if the government is able to successfully combine the tax rate cut with policy incentives around exports from India, the country could soon attract higher ticket capital intensive suppliers for display and semi-conductor ATMP (assembly-test-mark-pack), attracting investments of as much as $10-15 billion by 2023.“Last but not the least, the giga factories for lithium ion batteries will bring in another $5 billion,” Mohindroo said.