"To enter the Indian market, we need to make sure that the market is growing and secondly, that the policy of the local government is stable," said Bingshuang Chen, a representative from Holitech Technology Ltd., a maker of LCD and touchscreen panels. "We also care about the supply chain coming together with clients (smartphone makers) so that we can build an ecosystem."
Holitech plans to set up a manufacturing facility in India over the next three to five years, for which it is willing to put in 20% equity.
The government's Make in India programme is aimed at fuelling the manufacture of electronic products in the country, cutting imports to net zero by 2020. As a first step, many Indian and Chinese smartphone makers have started assembling devices in India. The Indian Cellular Association expects 500 million handsets to be manufactured locally by 2019. The target is to generate employment for about 1-2 lakh people.
The next step in the world's fastest-growing smartphone market is to set up a component manufacturing ecosystem so that handset makers can move up from assembling semi-knocked down devices to completely knocked-down and building from scratch up. For this, the entire component supply chain, which is largely based out of China, needs to be brought to India. This will ensure development of the country's mobile ecosystem and enable operational efficiencies from economies of scale and a reduction in prices.
Gordon Zhang, vice director of Transsion Holdings, said infrastructure that state governments offer such as power supply, water and gas required for manufacturing should be stab le. "Infrastructure of the Indian industry has room to improve," he said.
Transsion Holdings will launch its smartphone brand Tecno in India in the second quarter of this year. The company plans to set up a manufacturing plant for mobile phones in India, followed by tablets, lighting solutions and components. "We will focus on chargers and battery in the beginning and in the future maybe LCD modules," he added.
He Huang, representing Shenzen CameraKing Technology Co, said that while Indian handset makers offered a great market, a slew of Chinese players entering India at the same time will help create demand for a localised supply chain and make a stronger case for component makers to invest in the country.
However, he emphasised on the need for long-term policy stability because component makers would have to bring in their entire supply chain to India, which means they will invest much more than handset makers.
"It will be difficult for us to move out of In dia once we're invested," Huang said.
The concerns and challenges around production in India emerged from the first-of-its-kind summit to boost mobile handset and component manufacturing in India, jointly organised by the ICA in association with Mobile World (Shoujibao), China's leading mobile industry service platform.
Top officials from major Chinese companies such as Techno, Gionee, Coolpad, Holitech, Wingtech, Camera King, Galaxy Core, Poxiao, Vivo and Sprocomm participated in the summit and explored avenues to tap existing and emerging opportunities. Indian mobile companies such as Micromax, Lava, Karbonn, Spice, Vodafone and Intex also took part.
As per the joint initiative between Chinese and Indian mobile vendors, the local electronics manufacturing sector sought support of their Asian counterparts and ecosystem players to fulfill the ambitious objectives of Make in India and Digital India set out by the Narendra Modi-led government.
Source: Indian mobile industry expects Chinese companies to invest $2-3 billion
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