Manufacturing in India is becoming increasingly lucrative, particularly for domestic players. Certain policy initiatives have provided fresh impetus to companies to invest in this sector. To take advantage of this new manufacturing ecosystem, Micromax plans to ‘Make in India’ to tap the ever-growing market for mobile phones
Micromax has said that it will expand its manufacturing footprint in India by next year. The company has already signed MoUs with the Rajasthan and Telengana governments. Vineet Taneja, CEO, Micromax Informatics, says, “Most states are quite active right now when it comes to wooing players like us. The mobile category is very big, so the state governments have realised that if they want to create employment and generate revenues, this is the category for them to look at. The mobile phone market is actually worth over ₹ 1000 billion. So we are being wooed by a lot of states and we are in talks with quite a few, to decide as to where we should expand. Right now, we have a big plant in Rudrapur, Uttarakhand and we are very happy with that.”
Micromax churns out about two million handsets from its Rudrapur plant every month. Taneja shares, “The Rudrapur plant is currently being used for assembling mobile phones, but over time, we will evolve into a manufacturing unit.”
Regarding the company’s plans of expanding its manufacturing footprint in states like Rajasthan and Telengana, he says, “We are currently evaluating our options. We have inked an MoU with Rajasthan and Telengana, but that’s at a very nascent stage. We are yet to evaluate the commercial aspects of the investment. Any investment has to make business sense at the end of the day. We will have to see whether the states have a roadmap for the ecosystem to develop at a particular location.”
Taneja adds, “We have two options. We can either try to expand on what we have, or we must make some fresh investments. Of these options, we will explore the former option first. But if we cannot expand in the existing facility and if we get better incentives from the other states, we will look at diversifying to other locations.”
The ‘Make in India’ campaign is making manufacturing lucrative in the country. Regarding the recent initiatives taken by the Indian government, Taneja says, “There are tangible benefits that the government has put on the table. There is a 12 per cent custom duty that they have imposed on finished mobile goods, and this is one of the major benefits for local manufacturers, who do not have to pay this duty. 12 per cent is certainly a big amount.”
Taneja asserts that the Indian government is favouring the manufacturing sector, as a whole. He says, “With the ‘Make in India’ campaign, the government is supporting manufacturing for a variety of reasons. This is the first step on the road to establishing manufacturing. There is definitely a long journey ahead if we want to move from assembling to manufacturing, and also to boost up the scale of manufacturing (which in other countries is very high). We certainly have a vast distance to cover.”
By: Diksha Gupta
