Telecom Players Drive 'Make in India'

The government's 'Make in India' initiative is gathering momentum with telecom firms announcing plans to set up manufacturing facilities in India.

Possibly the most high-profile company to have recently announced Indian plans is Swedish equipment vendor Ericsson AB (Nasdaq: ERIC), which plans to spend INR1.32 billion ($20 million) on opening a new manufacturing facility in Pune in western India.

Ericsson already has a facility in Jaipur, which makes equipment for use within India, but the new center will be used to manufacture goods destined for export to some 180 countries.

Last year, India imported telecom equipment worth INR695.16 billion ($10.5 billion) while the value of exports was just INR204.75 billion ($3.1 billion). Increasing numbers of Indian consumers using telecom services has not translated into growth on the manufacturing side.

However, others besides Ericsson are planning to boost their manufacturing presence in the country. Micromax Informatics Ltd. , Karbonn Mobiles and Celkon -- three domestic device makers -- have joined forces to set up a facility in Tirupati in southern India. Chinese device makers Xiaomi and Meizu also plan to begin manufacturing equipment in India.

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A major push is coming from Reliance Jio , which has asked 4G device makers to set up shop in India. The company is in talks with other companies about procuring 4G devices for its network, which is to begin supporting commercial services in December this year.

While a recent slump in China's economic growth might partly explain a spurt in the number of manufacturing projects now under way in India, government initiatives and incentives are undoubtedly helping to boost the sector. The Digital India project, in particular, is providing a much-needed impetus in this area. (See Foxconn Plugs Into India's Manufacturing Dreams .)

— Gagandeep Kaur, contributing editor, special to Light Reading

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