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'India should focus on designing rather than assembling'
By Shoukath Kodubally
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Tuesday, 11 November 2008, 18:35 IST |
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Bangalore: Though India is being counted among the hot spots for developing innovative software, the country's condition is quite miserable when it comes to global hardware manufacturing. At present, India's share in global electronic hardware production is less than one percent, while China's contribution to this sector is over 14 percent, said the panel in Bangalore IT.biz on "Manufacturing Designed and made in India".
The panel pointed out that though Indian mobile market is growing at a rapid pace and sale of personal computers is increasing in the country, hardware companies here are still focusing on assembling the imported components rather than creating its own products. The panel added that India has good opportunities in hardware manufacturing with a healthy market and the availability of skilled labor.
While moderating the panel, Venkat Kedlaya, Chairman (SR), MAIT said that the Indian IT hardware manufacturers must shift their 'assembled in India mode' to 'designed and manufactured in India mode. "As the sales of PCs and laptops in India are growing leaps and bounds, all the labels of components and the whole product are only foreign brands. A label of Indian company is hardly seen," he specified.
"Though India is adding eight to ten million mobile phones each month, still people believe imported goods are superior to the ones manufactured in India and there is a need to change this thinking. There are several problems for manufacturers also. Major one is manufacturing of complete product or components are less competitive here. Since eight to ninety percent cost of a typical mobile set is materials and components, it would be more competitive to produce them here in India," Henry Mohan, Senior Director-Manufacturing Operations, Motorola India stated.
He also pointed out that the export performance of Indian telecom products is dismal and it remained almost flat from 1990 to 2006 at $ one thousand three hundred seventy three million. "Though Indian engineers are superior to anybody in the world, there is a systemic problem here. Indian Telecom product's quality was in second place in 1980 but now is not even in the top ten in 2008 but in the same period China has improved tremendously," he explained.
According to Sunil Shenoy, Director, Advisory Services, Ernst& Young, speed to market and innovation should be the major drivers for the growth of Indian IT hardware industry. "Hardware industry could not achieve growth as it faces so much of Govt and policy interventions which are not much in case of software industry. Import of electronics and hardware account for thirty percent of the India's trade deficit of $35 billion dollars," he noticed.
"There is need to design products for the Indian user. Unfortunately no Indian company is doing this, said Vinay Deshpande, Chairman, Encore Software.
The panel recommended that the Indian IT industry especially hardware manufacturing organizations should bring more investment in research and development (R&D) and the government should act as a facilitator to the overall growth of the sector.
