Samsung and Sony have announced their plans of setting up their manufacturing base in India, which is a major endorsement of the Make in India initiative. Both of these are global superstars of consumer electronics and this decision of theirs can have a huge impact on the future of manufacturing and industrial progress in India.
‘Make in India’ is an initiative launched by PM Modi to encourage manufacturing in India and to attract global investors and industrialists in engaging with our growth story. It was launched in September last year. Recently, the government altered labor laws to make it easier for foreign establishments to start their production in India.
Samsung
As per reports coming in, Samsung is in talks with UP Government to establish manufacturing unit to produce smartphones and tablets. $500 million to $1 billion worth of investments can be done for this project. JK Shin, who is Samsung’s mobile division head will be visiting India soon, and take the talks forward.
Tamil Nadu and Gujarat are on their radar for the setup, but as per reports, UP is currently their favorite.
Samsung has 20 year old history in India, and as of now, they have two factories in Noida and Tamil Nadu where 90% of their gadgets which are sold in India, are manufactured.
Spokesperson from Samsung refused to provide more details, but said, “However, we can confirm that we are in talks with state governments, including the government of Uttar Pradesh, where we have a factory already.”
Last year, Samsung experienced their first annual loss in three years when their profits fell down to $21 billion. They had to freeze salaries of their employees in South Korea, and as per industry watchers, their new manufacturing unit in India can be a good help in overcoming their lowering profits from Asia. Not only such a manufacturing unit will help them to distribute their products better, but also can be used to bring down costs, and encounter fast rising competitors like Xiaomi in a better way.
Sony
In the recently concluded World Mobile Congress in Barcelona, Kenichiro Hibi, head of Sony’s Indian operations said that they are planning to launch Indian manufacturing unit “very soon”.
He said, “Sony is looking at India for long-term growth. While no decision has been made yet, the potential products for manufacturing in India could be both flat-panel televisions and smartphones,”
Sony recorded revenues worth Rs 10,000 crore from the Indian market, which is their 4th largest market after US, China and Japan. Most of their goods which are sold in India are manufactured & assembled at East Asian countries like Vietnam, Thailand and Malaysia, which can be done in India to bring down costs, and to expand further. India can be used a platform to venture out into Middle East and Africa as well.
Kazuo Hirai, Sony Corp President is likely to visit India very soon to finalize their manufacturing plans.
Make in India is certainly a promising and growth oriented vision, which has the potential to disrupt manufacturing trends globally. China was able to win the first phase of new global manufacturing war due to low priced, mass scaled products. But now, in the phase 2 of manufacturing war, it’s the market reach and quality which matters; and India is all set to give a good fight for it.