Make in India: LG To Start Domestic Manufacturing of Smartphones With Rs. 1000Cr Investment In R&D
South Korean business conglomerate LG has declared their Make in India agenda; wherein they are planning to establish a domestic manufacturing unit for smartphones, and will invest Rs 1000 crore in Research and Development projects in the country.
However, they have a very strange condition before they start manufacturing in India: 10% market share.
Soon Kwon, Managing Director of LG India shared with Economic Times that they are planning to double their market share within the Indian market, and take it to 15%. Once 10% mark is breached, manufacturing will immediately start. He said, “Once we hit the 10% market share (in cellphones), manufacturing will eventually follow.”
As of now, LG has two manufacturing units in the country, where they are creating refrigerators and air conditioners. Soon Kwon refused to share further details on their plan to set up smartphone specific manufacturing unit, but, as per insider details, they would focus on the fast expanding smartphone market, where the market is witnessing highest growth.
Additionally, LG will spend Rs 1000 crore in various Research & Development projects currently running in India. As of now, LG has a team of 1000 software engineers, who are working at their Bangalore based R&D center.
Besides, as per Amit Gujral, Marketing Head of LG India, Rs 500 crore would be spent on marketing and promoting their 20 new models of smartphones which they would be launching this year, globally. Recently LG has launched G4, which is a 4G LTE enabled dual-SIM handset, costing Rs 51,000.
Make in India Expansion
Thus, LG joins the gang of other global MNCs such as Samsung, Sony, Microsoft, Motorola, Foxconn, Ford etc who had earlier announced their Make in India agendas by starting manufacturing in the country.
Even Indian companies such as Karbonn have shown interest in starting manufacturing units in India, rather than importing handsets from other countries.
Such is the impact of PM Modi’s flagship project, that Make in India is now being taught at IITs; and as per rough estimation, around 2.75 lakh new jobs were created last year as a direct/indirect result of the push for local manufacturing.
The seriousness of the agenda can be gauged from the fact that Govt. is not allowing FDI in B2C space, mainly because it can create obstacles for Make in India vision.
Although its still a matter of debate whether Make in India plan can succeed or not, going by our ancestors and ancient Indian history, there is a strong possibility that manufacturing sector can make a comeback in India.