Guest post by Sayan Sarkar.

Make in India’ initiative is Indian Prime Minister, Narendra Modi’s ambitious plan to bring in industries and help them manufacture their products within the country itself. Barely a year since the launch of the initiative, a number of mobile handset manufacturers have boarded the ship, while many are mulling to do so in the future. In this article, we aim to talk about the advantages for manufacturing devices in India and would also touch upon the companies which have already joined the initiative.

make-in-india-smartphones

Why ‘Make in India’ is beneficial for OEMs?

In the last financial budget, the Finance Minister of India, Mr. Arun Jaitley made many changes to the country’s industrial policies to make India an ambient place for manufacturers. He has significantly increased the import duties to 12.5% from the previous 5% – a sharp 250% increase. On the contrary, a OEM manufacturing devices in India can import spares at a bare minimum duty of 1%. Hence the new policy practically forces OEMs to manufacture their devices in India to save a huge amount of money by paying lesser duties.

While some may complain that this policy will affect the Indian smartphone market in the long run as the companies might start ignoring the country! But would any sane company ignore a country which presently ranks third in the number of smartphone users? In fact the way Indian smartphone industry is progressing, it’s just a matter of time before we tip US and aim at China.

Unlike the previous beliefs, the market has responded quite well to the government’s call and many have started manufacturing in India. Be it global giants like Samsung, HTC or local OEMs like Lava, Karbonn – all have joined the ‘Make In India’ bandwagon.

First Move

The first move by a mobile company was taken by the local OEM Micromax. Previously, the company used to import devices from China and rebrand them in India. But soon they realised that making in India was a better proposition. They opened their first factory in the northern state of Uttarakhand where they started manufacturing feature phones and tablets. They are even producing their LED TVs from the same plant. But this was before Modi’s ‘Make in India’ call.

And this time too the company responded well. Micromax’s online only sub brand YU came up with the first ‘Made in India’ smartphone namely the YU Yuphoria!

Time for the foreign brands to make a move

It all began with Samsung and Sony! These were the first among the global giants to announce India as a destination for manufacturing their devices.

The Korean consumer electronics giant already had invested in a production unit in Noida back in 2011 but not much had materialised out of the plant and it wasn’t fully operational. But in January this year, Samsung pledged to invest Rs 517 crore into the plant and even set up a 35,000 square feet campus for capacity and skill building. The best part is that company had also decided to manufacture their flagship Galaxy S6 and S6 Edge devices in the country by the middle of the year.

samsung-make-in-india

Last year the company had tied up with a number of Industrial Training Institutes (ITI) of government of India to train personnels for manufacturing their Exynos SoCs.

Following the path laid by Samsung, Japanese manufacturer Sony also announced its plans to set up a manufacturing unit in the country for its mobile and TV divisions. The plant is supposed to cater to foreign markets of Africa and Middle East as well. Presently, the company imports all its products to India from the company’s production units in Thailand, Malaysia, China and Japan.

Sony’s Head India Operations, Kenichiro Hibi had mentioned that the company is yet to zoom into an exact location to set up the plant. But they are working closely with the government’s on various stats to set up a plant. Our bet is on a plant either in UP or in the southern states of India (preferably Telegana/Andhra Pradesh).

According to a recent report, the Taiwanese company – HTC – has also announced its plans to ‘Make in India’. They haved joined hands with Global Device Network to manufacture their devices in India. The company previously used to manufacture devices for the local OEM called Zen mobile. HTC targets to produce only low and mid-range device in the country though. Presently, their sole aim is to manufacture devices ranging between Rs 10,000 ($158) to Rs 25,000 ($396). This would help the company to establish themselves in the budget section – a section where the company is nearly non-existent.

Chinese brands too don’t want to miss out

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(Pic credits: PIB)

Recent rumors suggest at a purported move by the world’s third largest mobile manufacturers, Xiaomi, to start a plant in India in Andhra Pradesh in partnership with Foxconn. Even the Indian Prime Minister during his visit to China paid a visit to the Xiaomi office to discuss their plans on ‘Make in India’.

In the meantime, Huawei has invested approximately $170 million or Rs 1051 crores to open an R&D unit in the southern city of Bengaluru. Huawei previously had an R&D department in the country but it was never as big as this. It is the company’s largest R&D facility outside China. The company in fact received clearance from the Indian government to manufacture devices in India after a long wait of 19 months since filing an application. It will make them the first Chinese brand to manufacture devices locally in the country.

India is an important overseas market for Huawei,” Allen Wang, president of Huawei’s consumer business group in India, told Reuters on the 15th of June this year. “We aim to become a top three brand in India within three years.

There’s also a word on OPPO and Gionee to set up their plants in the country. Gionee, which was one of the first Chinese companies to come to India earlier announced its plans to start assembling phones in India while planning a full-fledged factory over a three-year horizon. Oppo too announced its plans to set up manufacturing as early as August this year.

Even smaller brands like Phicomm and Infocus have shown an earnest interest.

Post the launch of the Moto G 3rd gen, the Lenovo owned company has also shown interests to manufacture in country. If so, then India would be the third destination where Motorola would be manufacturing their device. They already do son in China and Latin America. This might also lead to the reopening of the existing Motorola factory in Chennai.

Microsoft doesn’t want to lose a share of the pie

Microsoft is in talks with Taiwan based mass manufacturer, Foxconn Holdings, to manufacture their devices locally in the country. In fact, Foxconn’s top official had visited India a few days back to zero on a location to start their plant. As of now they have two places in the neighbouring states of Andhra Pradesh and Telengana on the radar.

foxconn-make-in-india
(Pic credits: Bloomberg)

While the Telengana plant will be used for manufacturing the Lumia devices, Foxconn has kept the Andhra plant solely for Xiaomi. The company has some ambitious plans too – they aims to set up round 10-12 manufacturing units across the country by 2020! Some rumors also suggest that Apple are in talks with Foxconn to assemble their iPhones down here. But let’s not delve more into the rumors as of now!

Indian OEMs too joins the party

Seeing their global counterparts stepping on the gas, local OEMs like Karbonn, Intex are now in a mood to follow the mantra – Why should ‘they’ have all the fun?

Karbonn recently decided to invest approx. Rs 800 crore in their manufacturing plants in Noida and set up a new one in Telengana. The company aims to assemble devices ranging between Rs 2,000 ($30) to Rs 7,000 ($110) in these plants.

We are not dependent on external funding. We are the only brand that has announced two manufacturing units. Out of the total, Rs. 450 crores has been allocated for our Telengana plant and Rs. 100 crores we have invested in setting up Noida assembly unit,” said Shashin Devsare, Karbonn Mobiles Executive Director. He further added, “In a year’s time, we expect local production to meet 60-70 percent of our domestic market requirement

mobile-manufacturing-india
(Pic credits: Business Today)

Same can be said about Videocon and Celkon as well. Celkon too have shown their allegiance to the state of Telegana by deciding to set up a plant in a town called Medchal. Videocon on the other hand decided to invest on their existing plant in Salt Lake, Kolkata to raise the capacity of the production line. Both the companies mainly plan to produce feature phones from their plants.

On the other hand during MWC 2015 Shanghai, Intex technologies limited announced their plan to invest a total of Rs 1,500 crore in manufacturing and research in India. They would bifurcate the funds into two parts – Rs 1,000 crore for setting up a new plant in Noida (their sixth so far) and expanding the existing ones and another Rs 500 crore in R&D. The R&D unit is mainly working on improving the software side of the OEMs.

Spice mobiles have treaded the same path too by signing a MoU with the government of UP to set up a plant in the state. They have already invested Rs 500 crore into the project.

Recently, after the launch of their first Android One device, Lava Mobiles also showed their interest to assemble in the country. In fact it they had decided to pump in Rs 2,615 crores in batches for the next seven years to set up two new assembling units in the country. The company already has one unit in Noida, which manufacturers nearly half a million smartphones every month. With the addition of these two new units the company aims to push up the production to a whopping 18 million smartphones/month! The allocated funds will also be used for R&D purposes too.

On the expansion plans, Lava International chief manufacturing officer Sanjeev Agarwal said, “The funds will be deployed over a period of seven years. We are in discussions with various state governments and we should be able to close in on a decision in the next three weeks. We already have a unit in Noida and by beginning of 2017, the second one will be operational too. We will take a call on the third one later. Once all the three plants are functional, we expect our total output to be 18 million units a month.”

Conclusion

It now appears that the initiative to manufacture devices in a country with the third largest smartphone user base has been taken well by the industry. More such announcements will be followed in the coming days and we will continuously update the section with more information as and when they happen. Do bookmark this page for future reference.

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One thing we need to make it very clear is that the industry is looking to save big money (as much as 11%) by assembling phones in India. This is not same as manufacturing phones. But then, true manufacturing of phones will take a long time and this is a good start, considering Make in India is just an year old campaign. True manufacturing will need the whole mobile phone ecosystem to develop, which not only needs time, but also huge investments. Also, some experts argue that manufacturing prowess comes at a cost on the environment, and India can’t afford that. That’s for another blog post. For now, Make in India mostly implies Assemble in India when it comes to smartphones.

So far it seems like Telengana is reaping the most from the government’s ‘Make in India’ initiative – at least that’s the case for the mobile industry. But we firmly believe in the fact that the big gainers of this initiative are the consumers. Expect some ‘Made in India’ devices by reputed smartphone OEMs at darn cheap prices.

This was a guest post by Sayan – who is a tech geek by heart who presently works as a Stringer at Gizbot. You may also find him working on his own blog Techabreakk.com. When he is free, Sayan spends most of his time reading motivational books, posting reviews on amazon.in (Top 50 reviewer) and answering all your tech related queries on Twitter. To know more about him get in touch with him on Facebook and Twitter.


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Author

Sayan is a technology aficionado who shares a keen interest in the booming startup scene in India. Prior to joining TechPP, he has had stints at GizBot and IBTimes UK. Currently based in Kolkata, Sayan is pursing a degree in Dental Surgery.

 
 

One thought on “Make In India: The Phone Side of the Story

  1. Can TCS, IBM, Accenture, Infosys be set up in AGARTALA which will provide job and ray of hope to many ?

    Is there any ray of hope for TRIPURA ?

    Lakhs of Educated Youths (and their families) of TRIPURA (2nd highest populous state in NORTHEAST) have been languishing in complete frustration for over a decade now (recent news on TRIPURA can be referred for details) due to lack of –> Progressive Economic policies, Meaningful development, Best of the industries and quality professional employment opportunities, Best of the class healthcare, Proactiveness in being nationally and globally competitive.

    Does anyone know why capital AGARTALA is not yet even an inch near to a tier-2 city like PUNE ?

    Does anyone know what TRIPURA have achieved (in terms of giving its educated youth much needed professional career opportunities at par with other progressive states) till date by focusing only on natural resource (rubber, bamboo, plastic) based industry, which in progressive states (e.g. Karnataka, Maharashtra) is considered as intermediary industry, while IT and High Tech industry (in Software Export) are the prime economy drivers !! Does any one know WHEN BRAIN DRAIN would be REVERSED in TRIPURA ?

    Does anyone know WHY poor and lesser educated people are still not able to live a life with self dignity – at par with those in other progressive states (e.g. An Healthcare firm or IT MNC firm not only employs Doctors, Engineers, Managers and other graduates – alongwith them there are many other supporting and maintanance staffs who get due trainigs, well paid and can make their own career as well !!).

    Does any one know HOW LONG (and WHY) people of TRIPURA (Youths especially) have to languish in backwardness when rest of the progressive states are vying for attention from top IT MNCs and High Tech firms to set up their base ??

    If tier 2 cities like PUNE, GURGAON – (with top talents from India making careers in these cities) – can achieve same through right mix of people, policies, push and willingness to embrace technology and competition – why can’t AGARTALA ?? Does anyone know what is (national and global) COMPETITIVE INDEX of AGARTALA CITY ?

    Hope much needed ECONOMIC VIBRANCY (like Bangalore, Mumbai, Gurgaon, Pune, Chennai, Hyderabad) is created in AGARTALA (to emerge as new SMART CYBER CITY of India!) with best of the policies and setting up of World Class Infrastructures.

    Really hope leadership in CENTER, TRIPURA Govt and Other Concerned DIGNITARIES takes a FUTURISTIC and PROGRESSIVE approach and goes BIG to put TRIPURA into national & international scheme of things and strives hard in making AGARTALA into an world class city signifying uprising India’s growing prowess!

    We really need to move forward by developing TRIPURA with world class infrastructures and bring it at par with best of the other Indian states in the shortest possible time!

    Yes – we do have logistical issues in terms of connectivity,tough terrains – which slowly but surely being overcomed with multiple links opening up through Bangladesh,Myanmar!

    Appreciating TRIPURA Govt and Center on the development works so far,would request to set higher goals and aim to make TRIPURA the new face of emerging India!

    Some of the very important issues plauging TRIPURA badly:

    1.INDUSTRY – Not a single High Tech corporate, Big MNCs – especially economy driving Service Sector (from IT, High Tech – source of higher disposable income – source of thriving economy) have a presence in TRIPURA – Need of the hour (with major connectivity projects on and due for completion in next 1-2 years) is to have many of these companies (e.g. IBM,Accenture,TCS, Infosys, Wipro,Cognizant, Tech Mahindra,HCL) set up Delivery & Consultancy centers (by facilitating them with setting up of necessary IT zones / parks – in the line of ITPL Bangalore, Electronics City Bangalore, HITEC Hyderabad, Rajiv Gandhi Infotech Park Hinjawadi Pune, DLF IT Park Chennai – with due URGENCY) – Which is a must to open up window of professional opportunities (and mass employment) for bright (More than 6 lakhs UNEMPLOYED !!) youths of the state. TRIPURA is also home to massive talent pool with combination of huge number of working professionals (working in other Metros and abroad currently), local educated youths, youths (and working professionals) from other parts of INDIA, neighboring NORTHEAST states and legal working professionals from Bangladesh and Neighboring countries! At the same time geographical proximity of AGARTALA to important BANGLADESH cities (and subsequently to other SE Asian countries) gives ample business opportunities for IT Majors to expand their client base across industrial domains (e.g. Digital Bangladesh project being envisaged by Bangladesh Govt). Does anyone know when a QUICK and DECISIVE step will be taken to make AGARTALA an epitome of IT opportunities where it would solve MOST SEVERE UNEMPLOYMENT ISSUE for lakhs of educated youths from TRIPURA ?

    2.LIFESTYLE – Not a single world class 5 star hotel (Taj, Leela, Oberoi, ITC), World class shopping mall (Phoenix Market city Mumbai, LuLu International Shopping Mall Kochi, Mantri Square mall Bangalore), multiplexes (PVR, Big Cinemas, INOX) , World class Retail chains (Walmart, IKEA, Pantaloons,Shoppers Stop, Croma, Reliance Retail etc) exists in TRIPURA – Need of the hour is to have many and which is a must for a better and modern lifestyle for both people of State as well as thousands of (domestic and international) tourists arriving in the state.

    3.EDUCATION – Not a single higher education institute of national importance (IIM, IIT, IISc, AIIMS, Symbiosis management institutes, Xavier management institutes etc …) exists in TRIPURA – Need of the hour is to have many (given the fact that a huge number of students from TRIPURA migrates to other states for pursuing Engineering, Medical and Management from best of the institutes) which is a must to bring youths at par to the ones in other part of India !! This will also help best of the brains from other parts of INDIA to know NORTHEAST (TRIPURA in particular) better!

    4.HEALTHCARE – Not a single HOSPITAL of national importance (in terms of professionalism , proven quality and trusted brand) exists in TRIPURA which is a must for those helpless people of state who has to run around and rush to Chennai and other cities for treatment even during those critical hours of life! – Need of the hour is to go PROACTIVE and INVITE best of the brands available (e.g AIIMS, FORTIS, APPOLO, MANIPAL Hospitals) to set up their HOSPITAL CHAINS at AGARTALA, at the same time highlighting enormous business opportunities they can derive from Medical Tourism Market comprising of Tourists coming from other Northeast states, Bangladesh, Myanmar, Nepal, Bhutan and other Neighboring countries. Does anyone know HOW LONG people would continue to suffer (Latest was Maleria epidemic) due to lack of best of the class healthcare in TRIPURA ?

    5.RAIL – Really hope TRIPURA gets connected to Trans-Asian Railway (TAR) Network with individual lines to MYANMAR and BANGLADESH – in the earliest possible time. Given the huge prospect of being a important Rail hub (catering to domestic and international traffic) connecting NORTHEAST to SE Asia and further to Europe, Hope AGARTALA rail station gets transformed into a world class Rail station (with best of the technologies, equipments, infrastructure and amenities) in the line of Chhatrapati Shivaji Terminus (Maharashtra) and Chennai Central station (Tamil Nadu). Also, need of the hour is to have a seamless Rail connectivity between all the NE capitals (Mumbai-Chennai like network need to be put in place for people to move across NORTHEAST easily without any hassles/security issues). Does anyone know when first Bullet Train will arrive in TRIPURA ?

    6.CITY TRANSPORT – Not the best of the Road Infrastructure and City Transport System is in place in AGARTALA! Need of the hour is to have world class technology (e.g. GPRS enabled systems) and equipments embedded in ROADS (e.g. Digital Sign boards, CCTV cameras, Automatic Traffic Signal Control System etc.) and PUBLIC TRANSPORT VEHICLES (e.g. High Tech VOLVO AC and Non-AC Buses, Double-decker Buses) ; and install a organized process (e.g. Daily, Monthly and Yearly Passes, Dress code for Bus operators) in place – with something like Ahmedabad Bus Rapid Transit system, Bangalore Metropolitan Transport Corporation, Delhi Integrated Multi-Modal Transit System! Even Lucknow, Meerut have set their eyes on Metro rail rolling shortly. Does anyone know when AGARTALA METRO will be flagged off ?

    7.AIRPORT – Really hope AAI comes up with an world class international terminal (in the line of Delhi, Hyderabad, Bangalore , Mumbai Airports) in AGARTALA with modern technology, infrastructure, equipments and best of the amenities! With growing economic linkage between INDIA and other ASEAN countries (latest being PM’s visit to Japan and Thailand) as part of INDIA’s ACT-EAST POLICY,it hardly leaves any room for imagination – the role AGARTALA going to play in near future being the hub of international trade. And SMOOTH and AROMATIC flow of INTERNATIONAL and DOMESTIC travelers (includes businessman, tourists, patients, students) will hold key to fully realize potential of ACT-EAST policy envisioned by INDIA’s leadership. Does anyone know WHEN International Airport would actually come up at AGARTALA ?

    8.WATER Ways – TRIPURA Rivers are connected to Rivers in Bangladesh. Need of the hour is to transform TRIPURA rivers into national waterways, set up World Class Inland ports (in the line of Kaladan Multi-modal Transit Transport Project) and connect them to Bangladesh River and Sea ports, which would ease TRIPURA’s landlockedness to a significant extent and improve Supply Chain and Logistical delivery of goods and services!

    9.HIGHWAY – Hope AGARTALA gets incorporated to have seamless access to SE Asia connectivity points (India-Myanmar-Thailand trilateral highway and Kaladan Multi-modal Transit). Also Need of the hour is to have Multi-lane express highway (in the line of Mumbai-Pune expressway, Delhi-Gurgaon Expressway) connectivity among all NE capitals. Can there be a Express Highway (via DHAKA) connecting AGARTALA and KOLKATA ?

    10.BUSINESS MEET – Not a single Global Investor Meet organised yet in AGARTALA (whereas in Karnataka, Gujarat and even Chattisgarh these are almost frequent affairs – Recent one being PUNJAB getting thousands of crores of investment out of a Investor Summit !!). Need of the hour is organize such event which would surely put TRIPURA in global map and radar of world class corporates!

    11.SPORTS – Not a single International stadium exists in AGARTALA to hold national and international level football and cricket tournaments (ODI, T20, Test matches, IPL, ISL, Challengers League etc) !!! Need of the hour is to set up an World Class International stadium with latest technology, infrastructure, equipments and best of the amenities (to the level of Eden Gardens Stadium, M Chinnaswamy Stadium, M. A. Chidambaram Stadium) to facilitate football and cricket crazy fans of TRIPURA (2nd Populous NE state!!), fans from neighboring NE states and neighboring countries of Bangladesh & Myanmar, budding cricketers and footballers from NORTHEAST to watch their favorite STARS in action !! This would also be a huge boost to Tourism, Relationship build up with neighboring countries, Opening up of many other avenues in industry starved NORTHEAST TRIPURA! For an instance, even though INDIA will be hosting 2017 U-17 FIFA world cup, there seems to be no chance of having few matches played in TRIPURA – though that would be the nicest thing to bring WORLD much closer to NORTHEAST TRIPURA !! Does anyone know when first international cricket match will be played in AGARTALA ?

    12.ECONOMIC ZONE – Really hope AGARTALA gets incorporated in the proposed BCIM (Bangladesh, China, India, Myanmar) corridor project and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) project. Having close geographical proximity with important cities like DHAKA and CHITTAGONG will surely help TRIPURA leverage it’s strategic location of being India’s Gateway to SOUTHEAST ASIA! Also there is a urgent need to build economic and industrial corridors connecting all NE capitals to leverage economic potential between Northeast India and Southeast Asia. Does anyone know when a Special Economic Zone (SEZ) will come up in AGARTALA? Can there be a ECONOMIC CORRIDOR set up between AGARTALA and DHAKA ?

    13.TOURISM – There seems to be no concerted approach in Branding and Marketing TRIPURA TOURISM with a wider internet reach through Social Media network, Top travel and hospitality web sites (in the line of Maharashta Tourism, Tamilnadu Tourism, Uttar Pradesh Tourism, Kerala Tourism, Goa Tourism) even though there is a huge scope for TRIPURA in both National and International Tourism Market. Also hilly terrains can be transformed into a major hub for Adventure Tourism (in the line of Ladakh) in addition to existing eco, cultural and religious Tourism.

    14.TECHNOLOGY – There seems to be no approach in promoting and using modern technologies e.g. Internet Of Things (Combination of Physical things, Sensors, Internet, Cloud, Big Data and Real time Analytics) – which allows to overcome day to day challenges and enhance quality of public life (e.g. Wireless sensors on Bridges and Buildings for precaution against earthquake and natural disaster; Smart farms to improve Agriculture productivity; Effective Monitoring of Healthcare for patients; Managing Rivers, lakes and flood situations; Managing Traffic Congestion; Managing Air Polution; Managing Forest Degradation; Maintaining Roads and Highways; Monitoring Goods Transportation; Monitoring vehicle speed and preventing Road Accidents).

    15.SMART CITY – Hope AGARTALA gets incorporated in the SMART CITY (with a Global imprint) project envisaged by NDA Govt. Can AGARTALA lead in implementing every aspect of Global SMART CITY and set an example ?

    16.ENTREPRENEURSHIP – Does anyone know why there is no notable start up (like RedBus, Snapdeal, Flipkart) yet from TRIPURA ?

    17.NRI – There seems to be no approach to involve NRIs from TRIPURA to come up with ideas, investment for rapid economic growth of TRIPURA – whereas Karnataka, Tamilnadu have seen major contributions from NRIs.

    18. TELECOM – Internet and Telecom services are still WAY BELOW PAR in AGARTALA (compared to cities like AHMEDABAD or BANGALORE)- while country have moved on with latest technologies like 4G !! Does anyone know HOW LONG people of TRIPURA have to be deprived from – seamless HIGH SPEED Internet and Best of the class Telecom services ? Does anyone know when AGARTALA would become a WIFI enabled city ?

    Also urgent need of the hour is to complete all the existing infrastructure projects as soon as possible and identification and sanctioning of all other infrastructure projects fulfilling above infrastructure gaps without any further delay!!

    Anything less than ‘WORLD CLASS’ would only defeat the very purpose behind infrastructure development of TRIPURA under ACT-EAST Policy!!

    IMPOSSIBLE – just means I AM POSSIBLE! If India need to catch up with developed part of the world,the most strategically placed Northeast (especially TRIPURA) need to be made into a developed region in the shortest possible time!!

    I strongly believe TRIPURA govt (in close co-ordination with Center, other concerned dignitaries & all corporate vissionaries) can certainly achieve this sooner rather than late, which would definitely give its people a better employment opportunities, a better healthcare, a better access to quality education, a quality lifestyle, and last but not the least a confident and connected TRIPURA leading India’s charge towards contributing to a more stable and stronger global economy!!

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