HOME > BUSINESS > Xiaomi’s first factory in India in Andhra Pradesh; victory for Chandrababu

Xiaomi’s first factory in India in Andhra Pradesh; victory for Chandrababu

11817117_10152895166191612_252117032059673693_n

In the tussle with neighboring state Telengana over attracting investments, Andhra Chief Minister Chandrababu Naidu has managed to win a small battle with the decision of Xiaomi to establish its first manufacturing plant in India at Vishakapatnam.

Though an official announcement about Xiaomi’s India manufacturing has not been made yet, the company leaves very little to the imagination with its ‘Make in India’ hoarding that greets arrivals at Vishakapatnam airport.

“We’re about to take a huge step forward here in India! Can you take a guess?” teased Xiaomi’s India head Hugo Barra.

The move is also a victory for the Modi government, which has been trying all the tricks in the books to get at least some electronic manufacturers to shift their factories to India.

At present, the only big electronic manufacturers in India are Samsung and LG. Last week, Sony also announced that it was going to get its Bravia Android TVs made in India via a contractor.

Samsung and LG set up their India manufacturing operations over a decade ago as the Indian government made it very expensive to import fully built TVs and refrigerators to India, while reducing the import duties on components such as circuit boards and LCD panels to zero or near zero levels. This led manufacturers to import these components and screw them together in India, giving employment to thousands of people in places like Gurgaon.

Earlier this year, the government moved to do something similar with mobile phones. In fact, over the past ten years, mobile phones have become a much bigger industry compared to TVs or computers in India.

Estimating the total number of mobile phones sold in India at around 22 cr in a year, and an average price of around 4,500, the mobile phone industry is worth about Rs 1 lakh crore or Rs 1 trillion per year. At that scale, it is bigger than the market for traditional consumer electronics such as TVs.

At present over 90% of the mobile phones sold in India are made outside the country.

While Nokia did establish a factory in Chennai, various market and company problems — compounded by government interference in India — ensured the shutdown of the unit.

Micromax recently started making phones in India.

LIMITED MANUFACTURING

It must be kept in mind, however, that ‘manufacturing’ in electronics is a bit of a misnomer. The correct term is ‘assembling’.

To manufacture a mobile phone, companies would need to make printed circuit boards (mother boards), integrated circuits or chips, LCD panels and so on here.

While Nokia did manage to get many of these things manufactured in India, most of the other companies that claim to manufacture phones in India simply import everything and just screw them together in the country. (The Nokia factory had only around 1,200 direct employees, though there were many indirect beneficiaries such as logistics partners and so on.)

The reason for assembling, and not manufacturing, is simple – India does not have the capacity to produce micro-chips (processors, memory chips, radio chips and so on) as it does not have semiconductor fabrication units or fabs.

India also does not have even a single plant that produces LCD panels. These components make up about two-thirds of the cost of a phone.

So even if every phone sold in India was ‘made in India’, India would still  be forced to import about Rs 65,000 cr ($10 bln) worth of components from countries like China.

However, companies like Xiaomi opening assembling plants in India can be seen as a first step.

TELANGANA VS ANDHRA

Ever since bifurcation, Telangana and Andhra Pradesh governments have been offering one concession after another to big industries to try to attract them to set up shop in the two states.

They offer concessions on land, water allocations, taxes and other assurances to industry.

Recently, Center for Science and Environment’s ‘Down To Earth‘ magazine said Telangana’s new industrial policy has diluted government checks in a big way. The policy, the magazine said, even offers self-certification and express clearance to project proposals within 15 days, and freedom from random inspections.

“Both states have allocated around 10 per cent of their water and large land banks for industry. Telangana is facing a prolonged agrarian crisis with 89 per cent of farmers’ families in debt – and neither state has taken steps to improve agriculture on which most people depend,” it said.

On the other hand, Andhra Pradesh is offering a land bank of half a million hectares and is trying to attract an investment of Rs 2 lakh crore. Like Telangana, the state is offering its natural resources uninhibitedly, said the magazine.
[socialpoll id=”2287480″]

Follow ULTRA.news
Havells to expand ‘Standard’ brand beyond switches, targets 1,000 cr sales Havells India said it has launched water heaters, switches and MCBs under its Standard Electricals brand, which has been known for its switchgear for close to five decades in India.The company said that it expects to expand sales under Standard to Rs 1000 crore in the next 3...
GST complaints coming mainly from tax-evaders – Adi Godrej Adi Godrej, chairman of one of India's largest manufacturing and real estate groups, said most of the complaints about the new Goods and Services Tax is coming from businesses that have been built on a model of tax evasion."The complaints about the GST are mainly coming from ...
Will Reliance Jio launch Rs 199 plan with 1 GB per day for 28 days? A new plan being bundled with Xiaomi's new affordable plan, Redmi 5A, suggests that Reliance Jio could soon launch its first monthly unlimited plan priced at Rs 199.The plan, valid for four weeks, will give 1 GB of data per day, unlimited voice and access to Jio apps.The...
Reliance Naval says not worried about IFC’s insolvency petition Reliance Naval and Engineering, the defence production arm of the Anil Ambani group, said it was not worried about the petition filed by bankruptcy petition filed by IFC.It said the international organization does not have its loan secured against the assets of the company. ...
Siemens Q2 sales hit by GST, profitability improves, orders up 10% Electrical goods maker Siemens Ltd reported an improvement in its profit margins, but underlying sales growth decelerated to 1.8% due to GST-related impact. The company usually posts 8%-15% growth in revenue.Net profit also showed a decline as last year, the company had exce...
Tata Power, Israeli partner get sonar contract from Indian Navy Tata Power said its Strategic Engineering Division, along with partner DSIT Solutions Ltd, received a contract to supply Portable Diver Detection Sonar (PDDS) to the Indian Navy.The deal is one of the the largest in the world for such systems, it said.The detection syste...
NRI bank accounts see mega outflows as Gulf crisis hits earnings Net bank deposits by non-resident Indians have fallen by nearly 90% so far this financial year as more and more foreign workers dipped into their bank accounts in the face of a crisis in the Gulf region, industry association ASSOCHAM said.Net bank deposits -- the difference ...
Priced cheaper, can Mi Mix 2 beat OnePlus 5 in India? The much anticipated 'bezelless' phone from Xiaomi, Mi Mix 2, has been launched in India at a price of Rs 35,999 for the 128 GB version.The phone is, without doubt, the most affordable bezelless device in India.In comparison, the Samsung Galaxy S8 -- which has thin bezel...
Adani, Saab tie-up; to pitch Gripen jets to India Defence and security company Saab, maker of Gripen jets, has tied up with India's Adani Group for aerospace and defence production in India."The intended collaboration would encompass design, development and production of Gripen for India and other high-tech products of nat...
India to announce new industrial policy in October The Indian government is likely to announce a new industrial policy in October, the ministry of commerce and industry said, and sought feedback from the public.Commerce and industry minister Nirmala Seetharaman will hold a final round of consultations with stakeholders soon,...
Modi’s reforms drag, power plants to face low loads, study India’s energy sector is facing low capacity utilisation in power generation as plant load factor is estimated to remain low at around 62 per cent until 2018-19, noted a recent ASSOCHAM-Crisil joint study.The study also expressed concern over the slow pace of reform implement...
Samsung loses title of India’s No.1 smartphone seller to Chinese vendor China's BBK Electronics, which sells its smartphones under brands such as Oppo, Vivo and OnePlus, has emerged as the top smartphone seller in India, dislodging Samsung which had been on top for six years.Samsung, however, continues to be the top feature-phone brand in the cou...
Expecting waivers, farmers stop paying back bank loans? The write-off of farm loans in Uttar Pradesh and Maharashtra seems to be encouraging farmers in other states to stop paying back their farm loans to make sure that they will get the benefits of any farm loan waiver program in their state. This has led to a sharp increase in farm ...
Xiaomi sells half a crore Redmi Note 4 so far Even as attempts are made to lower the consumption of Chinese products in India by a section of the population, Xiaomi said it has sold 50 lakh units of Redmi Note 4 smartphone in India in six months.A total of 100 mln smartphones are expected to sell in India in 2017, and go...
IT companies using illegal tactics to force workers to resign: FITE The Forum for IT Employees, arguably the IT workers rights organization with the largest number of well-wishers and supporters, accused IT companies of using illegal and unethical means to force their workers to submit their resignations.In a meeting with Maharashtra Chief Mi...
Demonetization took India forward by 3 years – SBI The demonetization of currency notes late last year has doubled the number of card transactions and helped push India's payment digitisation by three years, State Bank of India said in a note."Even after seven months post demonetization, the transaction value is quite large ...
GST to boost Indian electronics manufacturing – Assocham-NEC study The goods and services tax will give a big boost to domestic electronic manufacturering as costs will be significantly brought down, said a study by ASSOCHAM-NEC.“The local manufacturers will be able to pass on the tax benefit to consumers in the form of price reduction,” sai...
JSW Steel to build Rs 2,100 cr pipeline to import iron ore from Eastern India JSW Steel Limited said the company's board has approved a plan to build a pipeline from its Vijayanagar plant in Karnataka to the coast to facilitate the import of cheaper iron ore from Odisha and Eastern India."This Slurry Pipeline can be set up within 24 months at an estim...
Raymond opens Ethiopia factory to cut costs, easy access to US, EU Textiles and garments brand Raymond inaugurated a garment manufacturing plant in Ethiopia to gain duty-free access to the US and European markets.The plant was set up at a cost of Rs 100 cr and will employ over 2500 people in the first phase. More people will join later, the...
Reliance Industries expands paraxylene capacity, becomes global No.1 Reliance Industries said it commissioned its third and last crystallization train at its paraxylene complex at Jamnagar, making the company the biggest manufacturer of the key ingredient used in plastic production.Paraxylene is used to make intermediate chemicals that are t...