The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Monalisa Sarkar, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.
NEW DELHI: The government’s efforts in encouraging local manufacturing of mobile devices in India under Make in India through lower duty seems to be working. The government had thrown in sweeteners for local manufacturing in the Budget and there is an incentive of 11% when making in India against imports. Many companies, including some importing from China, is looking at making in India with investments of Rs 300 crore for setting up a factory. Gionee, Xiaomi, Samsung are looking forward to start manufacturing of devices in India while Huawei looks forward to grow in India.
Gionee, a key Chinese manufacturer which currently imports its devices in India, sold 40 lakh devices last year on a turnover of Rs 2,750 crore. Volumes are growing for them and they are looking to double their sales volumes in 2015 with revenues of around Rs 5,000 crore. They have decided to assemble phones in India while planning a full-fledged factory over a three-year horizon. According to TOI, Arvind Vohra, who heads Gionee’s business in India, said that the in next six months local assembly operations will begin. They will initially start with a contract manufacturing model and then establish an independent manufacturing model over the next 18-24 months. For having full-fledged manufacturing operations in India, there is a need to develop an eco-system comprising suppliers and other key partners. Currently, the company sources its devices from Gionee’s factory in China. The company, is consulting with Ernst & Young for this job.
Xiaomi, China’s top mobile phone seller, has also said that it plans to start manufacturing of devices in India. The company, which operates in India through an online sales model is firming up plans for an assembly operation.
Adding to the list, Samsung, the world’s top maker, has said that it will also expand the production of mobile phones in India including flagship devices like the Galaxy S6 and the S6 Edge.
Chinese manufacturer Huawei considers India a key market for the company as its product profile got stronger with the launch of new devices under its ‘Honor’ range. “Last year, we sold 3 lakh units of Honor devices and this year, we are looking at seven times growth in that number, at about 20 lakh devices,” Honor president George Zhao said.