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Whiter Indian Manufacturing
Even though, the government of India has now clearly come out with its preferential market access (PMA) policy, much needs to be done on the ground level and India still yearns local manufacturing 14 | January 2013
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s we move to year 2013, one question looms large: can we sustain the growth trajectory in 2013? In order for the country to grow undeterred, it must develop its manufacturing sector and create millions of new employment opportunities for the Indian youth. Ironically, though considered vital to the country’s growth, Indian manufacturing has contributed only about 15% to the GDP compared to services (about 57%). In light of this, the government’s initiative, the National Manufacturing Policy (NMP) seeks to increase the role of this sector in the country’s growth. When we talk about Indian manufacturing, Simmtronics is one company which has truly believed in realizing India’s potential for local manufacturing. The company has engaged itself towards manufacturing tablet PCs in India and has become a role model for the overall IT sector. According to Indrajit Sabharwal, Managing Director, Simmtronics, “Our plan hopes to encourage manufacturing to thrive in India so that it can spur the growth of the country at a faster rate and have a multiplier effect on the Indian economy. India is a young country with over 60% of population in the working age group of 1559 years. India will have to create 220-250 million jobs between now and 2025 if it has to exploit its demographic dividend. We are completely committed towards engaged ourselves in local manufacturing capabilities in the country,” he adds on. According to Mr Milind Shah, CEO, WishTel, budget tablet market specially is mushrooming with companies offering customised solutions to their customers at very affordable and attractive pricing. Design and performance are the key factors that consumers consider after affordability and use. “Any company offering the best affordable product which is highly effective, performance driven and has a great design is the leader. Being a developing country, there are several social issues prevailing in our nation and how to dissolve the issues should be our prime focus as a true Indian branded tablet. Education in India has been a long standing challenge with a growing population that struggles with poor infrastructure, low quality of teachers and availability of good quality study material. He also feels that now, it’s the ideal time to bring about the much needed revolution in the entire educational delivery system. “Today, education need not be restricted to the textbook method of learning, and it should be extended to Internet. Our objective as a technology and manufacturing company is to create MOBILITY
affordable range of products that can contribute to Society by extending Education for free and without boundaries. We also want to take advanced technology to such parts of world where every stratum of the society can access our products at an affordable
price. Wishtel intend to offers solutions to Universities and Schools worldwide and empower every student with a PC enabling them to learn and educate themselves beyond textbooks, access and create their own knowledge,” he adds on. Talking about the Indian manufacturing scenario, Mr Nafis Kazim, Chief Operating Officer, Shyam Networks Limited says that in today’s scenario keeping in mind India market, tablet is highly B2B centric and therefore needs specific customization of software rather than hardware manufacturing capability. We feel that such Indian companies which are focused on B2B clientage can sustain in this market by giving segment specific solution,” he adds on. Challenges Galore As Milind Shah
Indrajit Sabharwal, MD, Simmtronics
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“Our plan hopes to encourage manufacturing to thrive in India so that it can spur the growth of the country at a faster rate and have a multiplier effect on the Indian economy. India is a young country with over 60% of population in the working age group of 1559 years.” January 2013 | 15
Cover Story have come out with new inventions“Today’s scenario keeping in whether it’s new products or gadgets mind India market, tablet that have brought about a revolution in India. is highly B2B centric and “These players have cached on to therefore needs specific the niche audiences who have the customization of software spending power. On the other hand, Indian players have made a significant rather than hardware mark in the industry with their vast manufacturing capability. product offerings. We feel that such Indian This technological boom has caught the frenzy of people and people are companies which are focused exposed to the world of technology on B2B clientage can sustain Nafis Kazim, Chief Operating like never before. First it was the Officer, Shyam Networks Ltd advent of radio and television, then in this market by giving came in feature phones and now it’s segment specific solution” the era of smart phones and tablets where many players have jumped the a wide distribution network of over 400 bandwagon with their unique offerings. distributors’ across India. With government’s encouragement With so many options available in the market, to adopt low cost devices and many Indian companies living up to the expectations of the users yet providing introducing a growing numbers of affordable Tablets in them all that you need at the most competitive price, the market, popularity of the device amongst budgetI feel is the biggest challenge. At the end of the sensitive consumers has increased and is expected to day, it’s the consumer and his needs that matters,” sustain. Portability, connectivity, high efficiency& varied he explains. utility of the product will drive its adoption in the India’s tablet PC market is expected to double to coming years,” Shah explains. 6million units in 2013 from the 3million units in Speaking about the challenges in the Indian 2012. Budget tablets form the major chunk of the manufacturing segment, Mr Nafis Kazim says that market share. Education, BFSI, pharmaceuticals have since the hardware prices for all Tablet manufacturers been the major sectors who have adopted increasing are about the same it becomes at times difficult to use of Tablets. counter a customer on price targets. We believe that “This proves that the Indian Brands have been soon the Indian competence of software development fairly expected in the market which is expected to / customization will be playing a vital role in grow at a faster than expected pace. In just 10months Tablet’s imbedded with segment specific software meeting of our foray into the tablet market, Wishtel has India’s requirements. Hardware manufacturing is highly shipped close to 80k tablets in the country through
Indian manufacturing might shrink 7% by 2015: ISA report Local manufacturers could lose out on nearly $200 billion of potential revenue during 2011-2015 period, says a report from ISA. India’s electronic products manufacturing sector could shrink by as much as 6.7% in revenue by 2015 with the increase in consumption being more than offset by imports, according to a report, indicating that government efforts aimed at boosting the domestic industry may not succeed. Local manufacturers could lose out on nearly $200 billion (around `11 trillion today) of potential revenue in the 2011-2015 period, according to the report by India Semiconductor Association (ISA) in association with researcher Frost and Sullivan. The study covers a range of segments, including semiconductor design, 16 | January 2013
electronic components and electronic manufacturing services, apart from consumer electronics products. The overall electronics products industry, including imports, will grow by a compounded annual growth rate (CAGR) of 10% to $94.2 billion by 2015 from $64.6 billion in 2011. Out of this, imports are expected to rise 50% to $42 billion by 2015, according to the study. The government recently proposed a string of initiatives to boost domestic manufacturing under the National Policy on Electronics that include development of electronic manufacturing clusters, a fund to promote research on electronic development and preferential access to locally-manufactured products
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Cover Story manufacturing eco system driven lacks the basic infrastructure and Therefore the choice of getting the fully produced in India has many / economy of scale challenges,” he
and India clearly regulatory condition. hardware partly or challenges on price explains.
differentiator in the market place. Currently we have three models namely 7” Wi-Fi, 7” 3G and 9.7” Wi-Fi. Going forward we intend to launch 7” 2G for calling and 8” Tab in the Indian market,” he explains.
The New Policy The new National Manufacturing Policy (NMP) with its National Investment and Manufacturing Zones (NIMZ) has been approved and comes at a crucial time with the country facing a lower gross national product (GNP) growth compared to the recent past and smaller net inflow of foreign investment. Improving manufacturing makes sense: manufacturing is not only connected to other sectors but is also the jewel of a multi-strand necklace where the strands are flows of different kinds to and from other sectors. The government of India is taking a holistic approach to manufacturing, considering the different flows needed to make India a major economy. However, the government must further consider such initiatives as creating an Internet superhighway, virtual manufacturing zones to support IT solutions for industry clusters and finding supply-chain finance solutions to help tier-2 suppliers. What Future Holds In addition, the government must further skills “The first three months of 2013 our focus will be to launch PrithV enable devices (tablets and netbooks) development for the manufacturing sector for the in the market. We have set a goal of reaching out to long term. While considering different flows – that of 2lakh students with PrithV tablets by the end of 2013 materials, information, cash, skills, land use and even and we are working all ends to make this possible. prosperity While the government’s recently retracted retail policy Post the first quarter, we do have some interesting products lined up for budget as well as above 10K was touted to help the agriculture sector, it would range but its too early to talk about them right now,” have also helped the manufacturing sector to get end products sold, without which the sector cannot make Shah from Wishtel adds on. According to Mr Nafis Kazim from Shyam Networks intermediate goods either. Still, the government must Limited, the future looks bright as the government be commended on its vision and continuing efforts on has shown a lot of courage and character when it this front. Manufacturing also needs the flow of information for comes to developing and nurturing the manufacturing eco-system. “We are glad that the government of orders, order status, and deliveries. Although the rest India has taken decision to implement the “Preferential of the world depends on India for many IT needs, Market Access” (PMA) policy to gradually do component there is very little evidence of IT use within the level manufacturing in India in a phased manner. country. True, many Indians now have Twitter, Gmail We have success stories around clinching orders from or Facebook accounts, but these are not enough for Europe, Latin America and Africa. Again the market manufacturing. But before we get Cloud Computing for manufacturers, there expects embedding of specific software to be a we will need access to the Internet, a cheap and now ubiquitous way to exchange information – compared “With government’s to the expensive and awkward electronic data interchange (EDI). encouragement to adopt low Although Indian telecom majors cost devices and many Indian have provided mobile phones at much lower cost to Indian companies introducing a consumers relative to the West, the growing numbers of affordable quality of Internet access is poor and cost is high relative to the Tablets in the market, West. It may well be that, as in popularity of the device the US or Korea, the government amongst budget-sensitive or the public sector will have to step in by providing Internet consumers has increased and is Milind Shah, CEO, Wishtel “superhighways” and cheap access in expected to sustain.” order to help the overall segment to grow exponentially. India and China It is possible to manufacture a tablet in India. WishTel is proud to mention the Made in India tag on most of its packaging. “WishTel has a manufacturing unit in Mahape in Navi Mumbai. Some of the components like the LCD / LED screens that cannot be developed or manufactured in India at the moment logistically are imported from our partners abroad. However the motherboard which forms the main component of any device is manufactured in India at our Mahape Unit. 100 of other components that form the mother board are stitched on the mother board mechanically and these mother boards once ready are then mechanically and manually tested. Each mother board passes three tests and then the device is assembled at the assembling unit,” shah adds on.
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