One of the flagship program in India is "Make in India" and the emphasis is high on local manufacturing of all kinds of hardware and in all kind of sectors: be it consumer,capital goods or
any high tech equipment.Because of several factors prevailing today like Mobile Devices and broadband penetration and Attendant fiberisation etc Handset Manufacturing with foreign collaboration is going on.Some 20-25 manufacturers of handsets have come to the country to take
advantage of big Telecom Market here.The mobile or terminal manufacturing is dominated by Chinese Companies and different business models are being adopted to suit their investment pattern
and Capex requirement.
India has few options here.The total manufacturing involves investment in Capital Equipment and Raw Materials and Components.High Tech manufacturing involves quite a bit of IP of processes,patents and other proprietary materials.Normally the packaging and testing of individual
components modules is very low value add activity in terms of percentage of selling price of the so
manufactured products.As per industry the percentage is from sub 1 percent to three percent.The rest goes to areas where we don't have over riding control.So local value creation is very limited.
T&M services can impact in a major way here.All the variety of these services can be employed here,so that both the nature of hardware and value can be increased.Cost envelope of total device can be done to high scale.Suppose the services and application software generation to manufacture and test mobile devices is increased,and simultaneously the better sourcing of local components,the overall indigenous component will increase.We should easily aim for a 10 times improvement on packaging and assembly and test services.
We look forward for more ideas and comments how to step up the local manufacturing program?
Please share your views and comment.Thank You.
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