An entrepreneur summarized the national problem with manufacturing when she said, “Companies make promises about ‘making in India’, but still import from China. In my startup work, we can easily find designers and engineers but manufacturing is still a tough spot for us. IoT companies in India are still looking for Chinese manufacturers not Indian.”
Experts were quick to respond with examples like, “In Egypt, ‘Made in India’ Nokia phones are more popular than ‘Made in China’ Nokias.”
Mr. Hari Om Rai, chairman and founder of Lava International says, “In some time we will have more manufacturing factories. Right now around the Lava factory about 40 other factories have come up, there’s no room to even move around Noida.”
There were other leaders from device manufacturing companies that attested to the capabilities of Indian manufacturing standards and its economic importance.
Mr. Ramesh Vaswani, director and advisor of corporate affairs for Intex Technologies said, “India is capable of incredible manufacturing feats. We used to have a 4 to 5 per cent field failure rate in making speakers at the Jammu site and we have managed to reduce it to 0.5 per cent.”
Mr. Josh Foulger, country head and managing director for Foxconn International Holdings, India, said about quality of Indian manufacturing, “We use 3M as a supplier at a tier 3 level. It has made our products more competitive and better than even Chinese and Vietnamese phone makers, I would say.”
Mr. P. Sanjeev, vice president for sales at Huawei and Honor India (consumer business) said, “We have invested 750 crore of our own money in an R&D centre in India. India is already the second largest user base in the world and will be a critical region for Huawei and Honor in the next 5 years.”
Mr. Rai of Lava International continued the case for Indian manufacturing, “To reach the target of serving one billion unique mobile users, we must aim to serve seven billion. For the past 28 years, China has led design and manufacturing of devices. 80 percent is still manufactured in China. What happens after some time is that low end manufacturing shifts from one country to another.
China’s days as a manufacturing hub are almost over as costs of labor are too high. The software takes 75% of expense. It is very possible that India can be the next China, based on population consumption, and resources for deployment in manufacturing and design. Even government regulations are quite supportive. We have the potential to make what’s valuable also accessible because of the Indian market size and resources. Electronics is going to be a trillion dollar business by 2026.”
According to
Mr. J. S. Deepak, secretary, Department of Telecommunications, Ministry of Communications, it’s not sufficient to only aim to serve Indians, but it’s imperative to produce for the rest of the world as well.
“Startup India targets manufacturing to contribute 25 per cent of GDP by 2022. For this to happen it’s not enough that we produce for domestic use only but we must also produce for exporting.”
Speaking of the challenges India will have to deal with to become a manufacturing hub, Mr. Foulger said, “Setting up the supply chain and finding the right skilled labor to support increased manufacturing will be a challenge.
The mobile phone has about 450 components to it. We have chased suppliers across Brazil, Mexico, Vietnam and India to set up a good supply chain. At present, 95 per cent of the supply chain still touches China, so it will take time to replicate this.
Skill intensity and complexity required is very high. 20 per cent of the work force will be engineers, product experts and technical machine operators. The other 80 per cent of staff, which incidentally are mostly women should also be of high quality and require technical training too.”
Mr. Pankaj Mohindroo, president of the Indian Cellular Association (ICA), referring to the comment by Mr. Rai of Lava International said, “We can perhaps not get a trillion dollar market revenue from building devices here in India, but certainly, we can get a large part of the pie.” Sobering, yet still optimistic about India’s chances of becoming a manufacturing hub.
This year’s India Telecom conference ran under the theme, “Transforming India” and took a serious look at what needed to be done by policy makers and all stakeholders to tip India over its prevailing barriers to become an economy and a nation of people ready to tap the best of the digital era. The conference was jointly organized by the Department of Telecommunications, Ministry of Communications, Government of India, and Federation of Indian Chamber of Commerce & industry (FICCI).
Experts across the IT ecosystem, both local and international – government officials, regulatory authorities, corporate leaders, entrepreneurs and academicians presented their side of the story to reformers and policy makers at India’s leading international ICT dialogue taking place under the theme, “Transforming India.”
BW Reporters
Regina is a reporter for BW Businessworld. In her previous assignments, she has worked with Independent television Network as a news anchor and reporter in Sri Lanka
