From World's software hub to next hardware capital, can India capture the future digital market?
Consumer electronic brands such as Samsung, Micromax and LG are contributing quite efficiently towards making India the world’s manufacturing hub. Taking a cue from past successes and tapping global market can amplify the possibility.
In the last two decades, India has successfully emerged as the software hub of the world. Liberalized FDI policies and outsourcing have been the major factors behind such a major success in the country. That said, a successful software without a hardware platform is like a building without a foundation. Be it an email, a message or a video, it can only be accessed on a hardware platform such as mobile phone, laptop.
Of late, the Indian market has been witnessing an unprecedented growth in the number of users on digital platform. With this development, can India turn the tide and become the world's hardware capital as well?
Owing to a rise in the number of users on the digital platform, consumer electronics brands like Samsung, Micromax and LG are on an ever expanding path. If the recent numbers are anything to go by then India may surpass China in manufacturing supremacy very soon.
In the manufacturing industry, the success of indigenous electronic brands such as Rajesh Agarwal's Micromax is quite exemplary. Manufacturing plants of Micromax in Rudrapur, Hyderabad and Bhiwadi contribute to the electronic equipment manufacturing, the way Maruti did to the auto industry in the 1990s. With diverse portfolio and a good range of products such as Mobile phones, Televisions, AC, laptops washing machine & Refrigerators, Rajesh Agarwal’s Micromax has carved its niche and gained good momentum in the market over a period of time.
As per a study by Deloitte, India is expected to jump six ranks to No. 5 in the 2020 Predicted Manufacturing Competitiveness. To achieve this, the Indian government has set an aggressive target of increasing the manufacturing share to 25% of the GDP by 2025.
The convergence has already started between digital platforms and the manufacturing sector. It is apparent from Samsung’s investment of about Rs 2,500 Cr to transform its operations in India into a hub for components business. While Samsung is focused on assembling electronics in the domestic market, Micromax besides doing that, is also working to reduce the cost of production.
Speaking at an event recently, Rajesh Agarwal Micromax, Co-Founder said, “We have been frontrunners in the "Make in India" initiative, by assembling the products locally and quickly ramping up and building capacity of complete manufacturing in close partnership with the government." Additionally, the scale of manufacturing in India needs to be increased.
That said, it may not happen by just complementing the domestic market alone. Taking a cue from the success of automobile industry, electronic companies also need to be able to tap global markets. Entrance of more players can make domestic goods more competitive in the coming years. Only then can innovation and cost competitiveness become effective.