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India Mobile Congress, India’s largest digital technology event saw an overwhelming participation from global industry behemoths and deliberated on a wide spectrum of topics.

The panellists for this discussion were Nitin Bansal, Managing Director, India & Head-Networks, South East Asia, Oceania and India, Ericsson; Amit Marwah, Head of Marketing and Corporate Affairs, CMO, Nokia Corporation; JS Deepak, Former Secretary-Telecom & Secretary-MeiTY; Sudhir Pillai, Managing Director, Corning Incorporated, India;  and Harish Krishnan, Managing Director, Public Affairs & Strategic Engagements, India & SAARC, Cisco Systems, Inc.

The discussion was moderated by Chaitanya Gogineni, Partner TMT, KPMG in India.

Communications Today was the communications partner.

Chaitanya Gogineni. “India is going through a period of intense data and digital transformation. We have seen a very successful telecom revolution in India, where a large proportion of the population has been connected and for many, the first screen has been the mobile phone.

We are now seeing the next wave, the evolution where feature phones are being transformed into smartphones. We can see the explosion in data consumption, various companies and services are benefitted from this, and set to enter the next stage of transforming our businesses.

The COVID-19 pandemic and the lockdown have only served to further accelerate this trend, where we had a number of people rely on cellphones as their first information source.

Once we are on the other side  of the pandemic, we would have seen a significant realization in global economies, including India on the need for a resilient supply chain,  and its realignment from creating global economies upscale to a global factory model, and to a more diversified supply chain, which can withstand supply shock. It is this concept with which the Make in India program has further accelerated, with additional incentives from the government, and the call by the honorable Prime Minister about being self-reliant: the Atmanirbhar Bharat mission.

The question at hand is, while, due to the after effects of COVID, we have a weakening demand from some of the economies, it’s also an opportune time for us to transform manufacturing in India and take  the benefit of a low cost, large market and use this as the platform for global manufacturing.

Nitin Bansal. “It is very important for the country, that local manufacturing is encouraged, and industries and companies take advantage of setting up plants in India.”


Amit Marwah. “Besides manufacturing, it is the holistic programme that should be looked at. That includes how we can increase the overall investment in India, whether it is manufacturing or R&D. As 5G unveils in the world, we must consider what we can do within the country to make India a global hub for the future.”

Harish Krishnan. “As far as electronic manufacturing in India is concerned, we are going through a very exciting phase. India has always tried to become a hardware superpower, but in the past,  we have only had a plan for one or two years. Now there is a five-year plan in place, it may even be for a longer horizon. Having the advent of PLI scheme and a five-year window can definitely bring a lot of interest, as we have seen for the mobile phones. The plan is now being extended to other champion sectors including IT, servers and telecom products. Rs 12000 crore have been allocated for the telecom products alone.

I am also very excited about the shift from import substitution to exports. India is not as big a market as projected. In the telecom product segment, it holds 7 to 8 percent of global demand, and sometimes does not justify the scale of operation that is needed for efficiency. There has begun to be a recognition of this. And finally, also that value addition will happen over a period of time and requires patience.”

Sudhir Pillai. “Ideally the topic of today’s discussion must be Make in India, Make for India and Make for the world. I strongly believe that India is close to once-in-a-generation inflection point.”


JS Deepak. “As far as manufacturing is concerned, the vision and the big picture has been there for a while, but now we are getting real, and that is the exciting path. We are looking at scale, at urgency, and at long-term, so that there is predictability and certainty of policy for corporates all over the world.

The emphasis on exports is also a change because if there has to be growth, and jobs have to be created for the million additional people coming into the job market  every month in India, manufacturing is essential and a growth of 10 percent or thereabouts cannot happen, unless exports up by 10 percent. A lot of things are coming together, and that is the exciting part”.

Chaitanya Gogineni.Despite all the support, the regulations, and the intent, the response has been underwhelming, especially in comparison to the South-East Asian nations which are our natural competitors as well. And has still not translated to on-the-ground benefits. What are some areas where this initiative has fallen short, where it seems other countries are doing a much better job of incentivizing the shift in supply chains?”

JS Deepak. “India has a checkered history in the mobile and electronics manufacturing sector. We had a small but vibrant manufacturing industry in the ‘90s. With signing of the Information Technology Agreement in 1995, it kind of disappeared, and by 2005, we had a huge negative trade balance in electronics. This in itself would not have been a problem, if there were no job losses in manufacturing. But since electronics manufacturing formed a large proportion of manufacturing at that point of time, especially in the small-scale and the assembly sectors, it had a very negative effect.

Demand, domestically and internationally for Indian electronics dropped from 70 percent in 1995 to as low as 34 percent in 2015.

When this government came to power, it was trying times and then the Make in India program was launched as a vision for promoting manufacturing.

The first good impact was felt when India decided not to become a signatory of ITA-2, which would have deepened and widened the list of products and would have brought our tariffs down to zero and we would have been at risk of dumping and unbridled imports.

But more importantly it started India’s journey in using talents in a calibrated way, to create a level playing field for mobile phone manufacturing.  Cost of manufacturing in India was something like 10-12 percent higher than globally and the Union Budget of 2015 imposed duty of almost 11.5 percent, which made it viable to manufacture in India.

I term this as Stage 1 of promoting domestic manufacturing.  It had an impressive impact. Manufacturing of mobile handsets in India went up from 58 million units, valued Rs 20,000 crore to 330 million pieces, worth more than Rs 200,000 crore, a ten times increase. Today 96 percent of the mobile phones that we use are manufactured domestically. It’s a substantial change from where we were in 2014.

However, this was mostly assembly, and while it has led to the development of skilled persons, it is not high-value manufacturing.

This brings me to the second stage of promoting domestic manufacturing, which has happened this year. Schemes like PLI, SPECS, duty drawback, and EMC 2.0, which are substantive in the support that they provide, and are based on the production and investment benchmarks, which would encourage larger firms to come and manufacture in India.  And perhaps most importantly, that all of this has been done together.

Going forward, a lot depends on the implementation. Incentives and policies must be implemented the way they should be, and disbursements made so that they lead to investments in the right places.  Looking at India as a global destination for manufacturing in many areas, especially in electronics has made a substantive difference too.

I would like to draw a parallel between the auto sector, which has been hugely successful for manufacturing in India and later exporting and the mobile, electronics and telecom products.”

Chaitanya Gogineni.What were the driving factors to set up manufacturing in the first place in India? And how has the experience panned out? What are some learnings that you can share, which could also influence the policy framework?”


Nitin Bansal. “At Ericsson, we were the first ones to start manufacturing telecom equipment in India in 1994 and the reasons were manifold:

India is a very strategic market.  There was demand, that was scalable. The number of radios required to be delivered and deployed on an ongoing basis, justified to have the facility close to the customer. India also comes with a very specific set of requirements in terms of how much spectrum efficiency is wanted in the system, both from a hardware and a software perspective.  We learnt this very early in the stage.

Our experience of manufacturing in India has been great. We were able to fulfill the requirements for India, in a most efficient manner. And last year we also started exporting from India. Our ambition is to export close to 100 percent of our production. We manufacture for the requirement in India, for the products which are designed and relevant for India and are exporting them to other markets as well.

With 5G coming in next year, hopefully, it will become even more important, as there would be a need for thousands and thousands of radios to be rolled out. And we want to be sure that we are in position so that, time-to-market and time-to-delivery, is as short as possible.”

Harish Krishnan. “The telecom industry moved from high-end products like routers and switches, these being low-volume, highly complex products, to substantially different, mobile phones. For example, while the global telecom market is around USD 100 billion, India demand is USD 7 billion. It is pretty small, in terms of the global numbers and as we go up the value chain, demand is even lower.

India-to-India is interesting, but India-to-world is the one which is exciting. And that’s why I am particularly delighted that the Government of India is moving away from a mindset of import substitution to export orientation.

The global companies today are looking at India in 3 lenses in this space:

The global resiliency model, where they are looking to see that products can be manufactured at a global scale from India;

Some ongoing studies on DNA mapping of the core competencies that India has, indicate that we are particularly good in plastics, so plastic-intensive products can perhaps be manufactured from India;

Component sourcing is an important one. As in this pandemic, most companies had multi-site manufacturing facilities, but one area that everybody worried about most is of components that typically come from a few countries in the world. And that is where I think India’s focus can lead to a win-win investment.

India needs to do a couple of things.

Be realistic about the cost disparity of 7-8 percent that exists, as revealed by various studies that have been done in the past.

And secondly, link exports to PMA. One of the problems in the past has been the introduction of preferential market access, which has not worked, neither for the Indian companies nor for the global companies. Because in this product segment, it is impossible for one company to manufacture all the products and sell in India. Therefore, they will probably manufacture a few products at a global scale, and export, and we should provide a linkage between exports and PMA and give the global companies CMA credits, and that will make it more feasible.

Thirdly in terms of value addition, in the past, we have had some unrealistic expectations. Value addition has direct relation to the component ecosystem. The cost disparity of 7-8 percent exists predominantly because these components will have to come from other countries. If components are available in the country, there is no reason why the global companies will not source from here and therefore there will be no need to coerce them to do so. It will happen  through market forces. We need to have a realistic expectation of value addition. Initially it can be low, but over a period of time it will go up, and it is in the interest of the manufacturers that it does.”

Amit Marwah.  “I agree that a lot more can be done and may be other countries have taken a lead in the last couple of years.

But Nokia is one of the success stories in India. We are celebrating the 25th year of telecom in India. The first mobile call was made on a Nokia phone, on the Nokia network. And in these 25 years, we have had a fantastic run. We started with 50 employees and today our head count is 15000.

We are manufacturing in India. We have 30 OEM factories, but only two factories that we own, one in Chennai and the other in Finland.  In this facility, we started with 2G radio equipment. Since the last two years, 5G radios manufactured in Chennai are being exported, with 50 percent procured by the most advanced markets. It is now producing the cutting-edge AirScale massive MIMO solution. The equipment is already being exported to many countries that are in advanced stages of 5G deployment. This will enable us to support Indian operators as they prepare to launch 5G.

And we have done a lot more. We have made a huge investment for R&D in India and have a team of 6000 people. The R&D centre is undertaking research in various advanced global telecommunication technologies.

Having said that, a lot more can be done and should be done. Increasing value addition  and manufacturing the component ecosystem in the country has always been a priority for us.

It is also important to create a market access which is fair and not restricted by the ownership of a company. With a team of 15,000 people, the largest telecom manufacturing facility in India, an investment of Rs 600 crore in the factory, Rs 3000 crore worth production, of which Rs 1500 crore are exports, over a dozen Indian component suppliers supported through our localisation program, world class Industry 4.0 manufacturing solutions deployed, we qualify as a Make in India manufacturer as any other. Our existing investments need to be given due respect  and acknowledgement, while deciding on the next steps, so that we don’t end up into a situation  that, companies like us cannot take advantage of the PLI policy, and we are able to take manufacturing and the localization to the next level.”

Sudhir Pillai. “As a company that is invested in India, I can outline key aspects that drive investment decisions for most of the organizations:

Market potential. That is fundamental to any business, and India has that, the potential in a country of a billion people has billion opportunities.

Consistent policy directions from the government.  In today’s fast paced world, the government plays an ongoing active role in maintaining a level playing field.

A consistent policy and an equal opportunity to complement India’s market potential are the great enablers for investment.  And these are the two big matrices that we also looked at before investing in India few years back.

The support that we have been receiving from the local and the central government has been phenomenal.  We have seen the government graduate from that being a regulator to a facilitator.”

Chaitanya Gogineni. “In the second half of this session, let us focus on the enablers and within that on how we can increase scale and on value addition, how do we incentivize production of higher value components and the more advanced components?”


JS Deepak. “The issue is about value addition.  Whatever success we have had in manufacturing has been in assembly, and in the low tech sectors.  With the second generation of investment promotion and domestic manufacturing promotion policies, the challenge is to get components to go deeper down in the value chain and attract the bigger companies who are anchoring global value chains to India.

Even within the post COVID-19 world, now that we have experienced production disruptions, because of supply chains breaking down, and just-in-time inventory is not working out, the need to get into the depth of the value chain and the higher profit end of the value chain for a component manufacturing ecosystem, that can contribute to the final product will necessarily need to be done.

And a mix of the schemes, PLI, SPECS, duty drawback and EMC 2.0 could be useful, both for existing entities as well as for new planned investment. It is particularly exciting for larger companies, this is something that they have been waiting for. With a long-term horizon of 5-8 years, and WTO-consistent, so that there is no risk of being hauled up in Geneva and the benefits promised withdrawn, should go a long way.

In the electronics and the devices sector, 85 percent of the USD 500 billion market of the mobile devices components and phones is controlled by about six companies, which anchor large global value chains. And now that they have a China-plus-one strategy, and want to diversify their  manufacturing, it would be an opportune time for India to be the option.

There also needs to be a clear understanding of the Atmanirbhar scheme. The government has clarified, it is not about self-sufficiency, but about self-reliance; it’s not about protectionism but about imaginative use of tariffs and subsidies to incentivize manufacturing of higher value products. The idea cannot be that we will manufacture everything, and prevent or control imports. Our dependence on semiconductors, microprocessors, and lots of components will remain for a long time. The strategy implied in the program is not to try to manufacture everything, but seek to develop scale in champion products, by incentivizing the leading companies, existing or new, to invest and to take advantage of this, over a longer period of time.”

Nitin Bansal. “There are couple of things to look at :

With 5G coming in, it’s not only about the infrastructure, it is also about getting into IoT kind of devices and all the other variants. For 5G is not only for consumer applications but also for the enterprise applications, which means there is a need to not only design but also manufacture the devices that are required for making this a success on the enterprise front.

So, the PLI scheme, must also attract and benefit the component manufacturers to invest. And also, those investors that help automate industries for healthcare, agriculture or whichever area that can benefit from connectivity.

Connectivity is a very important foundation, and the country digitalization index is paramount, that is, support must be provided to the industry that speeds up the digitalization vision of India.

Last but not the least, there is no doubt that the schemes under discussion will be a

good catalyst for attracting investment. But, equal market access has major relevance too.

Our company has been in India since 1903 , and has more employees in India than we do in any other country in the world. There should not be a demarcation between a foreign company and an Indian company. And equal market access must be provided. While keeping in mind, that connectivity is a critical national infrastructure, the government needs to make sure that the investments are coming and we are able to provide the necessities that are required in the country.”

Amit Marwah. “To go to the next level, more value addition and scale are required.  Nokia India has the most advanced,  state-of-the-art manufacturing facility. But a factory can only add about 10 percent of value into a finished product, the rest 60-70 percent comes from the components, and the balance, comes from software or any other integration or localization done.

And to be able to do value addition, there needs to be emphasis on software, and all is not only about IPR. Companies as ours, are global in nature, and have IPRs spread across the world. All the IPRs cannot be listed in India. Due consideration needs to be given to these aspects, and to the investments that we are making in R&D, or the number of jobs we are creating in R&D.

Re scale, no doubt India is a very big market, but for companies as ours, it contributes about 5 percent to our global revenues. Yes, India has a huge base for growing, but serving only India will not take manufacturing to the requisite scale. That has to come from exports, which will come from basic factors like, globalization is linked to harmonization, there is a need to create products in India which have a global demand, so that they are not only manufactured in India, for India, but they can be used across the world and only then can the scale of exports be increased.

An ecosystem needs to be created, so that 5G brings these additional values into the whole chain, and much more can be done in terms of whether taking 5G for IoT or using 5G to enable startups. That can then become the global hubs for demand of 5G  for use cases, which will be used by the rest of the world. It is not about manufacturing a 5G radio, it is much more than that. A holistic approach needs to be taken, and only then we can take it to the next level.”

Harish Krishnan. “I echo what Amit just said. Cisco too has been in India for 25 years, and has 30,000 employees, the largest outside the US , enabling a cutting edge R&D technology in Bangalore and Pune, and other places in India too. The government should stop taking  the investments made here for granted. There needs to be some value processes, while all IPRs might not be registered in India, there is a lot of knowhow that is transferred, and several of our companies work with young startups.

We could all be in the inside ring of Atmanirbhar Bharat, and in terms of PMA and such other aspects, a more holistic 360 degree view of the companies needs to be taken.”

I have been around for a long time in this industry. These seem the most exciting times in the world, and for India especially, in the space of manufacturing.”

Sudhir Pillai. “Every multinational company has a typical playbook, when it enters a new market. The existing global products are introduced to the right income segment or the top end of the segment, as long as the product addresses the customer’s needs.

The second real opportunity is the emerging burgeoning middle class, that in India is also aspirational. For that particular segment in India, we ideate, collect the voice of customers, engineer and manufacture the product. And then also vertically align or vertically integrate the supply chain and horizontally collaborate with the network orchestrators, the people who have good access to the Indian market.

Finally, a third tier of opportunity comes from outside India, where we use a product Made in India, for the world, where the challenges may be similar, but the opportunities are not same, like the frontier markets.”

Chaitanya Gogineni.The last question is, What is your mood, your sentiments for the future? Bullish, cautiously optimistic, neutral, or pessimistic?”



Nitin Bansal. “We are very bullish on India.  Based on the recently released Mobility report  we expect a 20 percent increase in the data consumption in India. With 5G expected to be introduced  next year, there will be a need for manufacturing India-specific products, and a need to address the challenges of connectivity, digitalization, and automation. We see major demand coming in for creating a robust foundation.”

Amit Marwah. “We are 100 percent optimistic. With the intent of Atmanirbhar Bharat and the  5 I’s that the Honorable Prime Minister laid out as being its pillars, we have shown our Intent in India in the last 25 years. We have made Investments in India, and will continue to do so. The Infrastructure is expected to grow and we want to leverage that opportunity. And Innovation is our core, so if we are given the opportunity, we will Innovate in India. We will do new things, set up new products, and give new software. To make all this happen, what we need is Inclusion, and  if we are included in the journey, we are definitely there and very optimistic.”

Harish Krishnan. “We have always been bullish on India and the future always looks great in India. We are already seeing a rebound in the economy.

When confronted with the COVID situation, within a week’s time we were able to get our entire workforce seamlessly working from home and saw productivity increase.

We are very happy to see the export focus and realistic estimation of deficiencies in the five-year plan on the part of the government, which augurs well.

We remain bullish and optimistic about India and the world.”

Sudhir Pillai. “We are also very bullish.  I see strong, favourable macro trends developing in India and would like to position ourselves ahead of this macro trend.  So that, it becomes a tailwind for us, rather than a headwind.

We believe that, we are very close to a once-in-a-generation inflection point, so are very bullish about India right now.”

JS Deepak.  “It is very gratifying and encouraging to see leaders of large global companies working in India, bullish.

You had asked, whether we had missed the bus, or we were late? Your question seems to arise from the fact that, when companies migrated from China, they did not move to India. I would not be worried about that, because in the first stage of migration, these were the companies that were exporting to the US, from China. And because of tariff and trade wars, they had to move out of China, and they moved mostly to the ASEAN countries, as part of the US-ASEAN strategic partnership, and their trade rules are sort of harmonized to the US.

Some countries like Vietnam have very attractive incentive packages. Vietnam is providing 10- 15 years of  direct tax holiday for new companies, that are investing, whereas our investment schemes were challenged at the WTO, and were uncertain and likely to be withdrawn. But I think that is in the past. The new package bodes well for the country, the clear realisation that it does not only have to be manufacture for India, but for the world. And exports are important, exports of value-added, manufactured products.

There has been a very important, subtle change in policy making. It does need to be followed up, though. We need to support R&D for components and for more IP-loaded products, and also at the front-end, we need robust and dynamic export promotion councils. I am  a great one for suggesting that. If India needs to export components, it will then be a new player in new markets, like America, Europe and the rich countries of Asia. The export promotion councils for mobiles, for components, for devices, and for telecom products which are focused, specialized and have the clout and backing of both the industry and government, will take it forward.

We are at the beginning of the second stage of incentives, we should wait it out. The optimism of the industry is very encouraging and I feel very excited at this time, and if the orientation of the government  continues to be to promote trade and technology, to trump bureaucracy  and burdensome regulations, we will come out with flying colors.”

Chaitanya Gogineni. “Some of the key thoughts that have emerged from the discussion may be summed up as:

At this point in time, we are at a very opportune moment.  And are seeing huge investments in fiberization, in fiber to the home, and in consumption of data and content in ever increasing numbers.

The industry is now rebounding from the effect of recessionary quarters.

We are also seeing increasing investments in technology, IoT, and smart manufacturing.

The market in India is very attractive, but more than that we have an enabling and supportive environment, both in terms of investment in infrastructure, and in regulatory support and policy guidance from the government.

The optimism shown by the panel is extremely encouraging.

Clearly, the future success story for India, will be to replicate, what we saw in the auto sector, where we were able to increase the value addition, the scale, and competitiveness and export to the other markets.

The acid test is,  can we emerge as a high tech components supplier to the developed markets, where it is not just a cost arbitrage but a competency arbitrage?”
CT Bureau

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