Wednesday, July 17, 2013: Indian handset vendors are now looking for options for local manufacturing of products. This move is the result of rise in import costs as production cost in China are increasing and is further coupled with hike in import duty. All mobile handset companies in India currently import their products from China.
With the rupee depreciating further, Indian mobile vendors including Lava, Intex, Maxx and Karbonn have hiked the price of their products between a range of Rs 100 and Rs 2,500 on every product and this 6-12 per cent price hike has been effective from the month of July.
Now, that the currency fluctuation is taking its toll, some of these vendors feel that manufacturing locally will be able to safeguard fluctuating costs to quite an extent. Most Indian manufacturers depend on volume sales and any price hike on products is unwelcomed. The current hike too might invite a reduction in volumes, and total profits according to sources.
Maxx Mobile has already established a manufacturing unit in Hardwar in Uttaranchal and production will start by the end of July this year. Similarly, Intex too is looking at a domestic unit at Baddi in Himachal Pradesh that will incur an investment of Rs 50-100 crore. S. N. Rai, the director and Co-Founder of Lava mobiles too is exploring possibilities of a local manufacturing unit.
The Indian vendors also say that there have been an increase in cost of production by 20 per cent in China and this coupled with the hike in import duties is forcing local companies to look to other options. Sashin Devsare, the executive director of Karbonn Mobiles says that there has to be a local ecosystem suitable for manufacturing in the country. For this to come up, special skill sets are required and India isn’t still ready with it.
