Microsoft, Motorola To Jump Into Make In India Bandwagon; May Start Local Manufacturing Soon

PM Modi’s vision to make India a self-reliant manufacturing hub via Make In India program is now getting some major traction.

After Samsung, Sony and Ford, reports are coming in, World’s largest software company Microsoft and one of the biggest phone vendors Motorola are planning to set up their manufacturing base in India very soon.

Chris Weber, corporate vice-president at Microsoft Mobile Device Sales recently said, “We’re evaluating that (local manufacturing) constantly in terms of what our local footprint is.”

Microsoft is considering to set up a manufacturing unit, which can produce premium, high end smartphones in India, to take on other established players such as Apple and Samsung.

Motorola, which has a 3% market share in mobile phones sold in India, is also considering a manufacturing unit in India, influenced and inspired by PM Modi’s Make in India vision. They already have a factory in Chennai, which was shut down by Google as a cost cutting measure in 2013.

Marcus Frost, Motorola’s global senior marketing director forEurope, Middle East, Africa and Asia Pacific said, “We expect to soon take a call on the possibilities of India manufacturing, considering we are significantly growing sales in India and the smartphone market here holds enormous potential,”

As per reports, they are currently analyzing and studying Make In India policy, and will come up with a unit by the end of this year.

Why India as Manufacturing Hub?

As we had shared earlier, global biggies such as Samsung, Sony, Ford along with tech startups such as Xiaomi, Asus and others have expressed keen desire to start new manufacturing units in India, and expand their base.

One of the major reasons is the enhanced tax structure for imported units into India, which drives up the cost and makes the product expensive; which is a red flag for a price sensitive market like India. In the last budget, Govt. had announced increase in import duty for assembled mobile phones, computers and electronic gadgets.

As Microsoft clearly stated, they are working hard to bring down the price of their hardware sold in India, and local manufacturing is the best option. Infact, in Microsoft’s case, they are trying to purchase the dormant Nokia factory in Chennai, which they failed to take control of during Nokia’s acquisition as a result of tax disputes. In case they are able to acquire this factory, then Microsoft can start manufacturing their smartphones right away.

Market expansion is another very strong reason for initiating manufacturing in India. For example, Motorola sold 30 lakh units of phones in India last year, which is only 3% of the overall market. On the other hand, Lenovo-Motorola, which has several manufacturing hubs in China controls 13-15% of the smartphone market there.

Local manufacturing not only will help phone vendors to bring down cost, but also instill confidence and trust among local buyers.

To assist manufacturers into setting up their base in India, Govt. has already announced easing labor rules, along with introduction of several sops and tax reforms.

We will keep you updated on Make in India campaign as more MNCs join the bandwagon.