|
| |
|
| |
 |
 |
 |
| |
|
|
|
|
|
 |
 |
 |
|
|
|
| Creating an Electronic Environment in Global India |
| |
| The Rupee is up and so is the economy. After having been thrown into the deep end of a worldwide Outsourcing upheaval, India has emerged out on top of other countries with its BPO and KPO capabilities. A large chunk of cost cutting measures in major economic powerhouses like the United States and Europe have led to a major growth in the Economic stature of an Outsourcing Paradise like India. |
| |
| India’s fast developing middle class segment of society has an increased buying power that has alleviated the growth rate of industries producing B2C, as well as B2B products. A strong infrastructure setup ensures that incoming companies, no matter how big or small, have a platform ready for setting up base in this country. Electronic products form a major part of the consumed products in today’s India. Everything from Mobile phones to Computers require a strong and reliable circuit to function efficiently and without error. |
| |
| That is where market players, of the level of Jabil and Flextronics, enter and start operations in India. Favourable cost of labour, as well as a strong legal structure, ensures that setting up is a bit more ‘carefree’ as compared to most other locations of choice. The requirement of Electronic hardware is extremely high, with the boom of the Telecom industry and a plethora of consumer goods that have hit the market. Companies have recognized the Indian consumer’s increased buying power, which has been signified by the 21% rise in the industry revenue in 2006, over 2005. |
| |
| India is touted as the “next big thing” in the Electronics Manufacturing Sector (EMS). China being the market leader, has the advantage over India mainly due to the lower transportation costs of goods, across large distances. The higher costs of the supply chain have been hampering India’s chances of being rated the ‘most preferred EMS destination’. Local manufacturers are either small or low in number. This has opened the opportunity for foreign players to come in and take over. |
| |
| Although, it is not all sugar and honey for these larger foreign corporations. India may have a proven skill-set in Product Design, Customization and Quality Assessment, but what it lacks are good components. Shorter Product development time and lower Research and Development costs are important and to some extent, vital for the survival of a market player. For higher volumes of production, competition is increasing with bigger companies jumping into the ring. Smaller players are rushing for mergers and acquisitions whereas bigger companies are facing high attrition rate of skilled employees. |
| |
| Sourcing components locally has also been a major issue for corporations of the likes of Nokia. Although there is no dearth of components, the problem has been the quality factor. The requirements of components are such high in volume and follow such stringent guidelines, that there are extremely few vendors who will fall into the supply chain process of Nokia. Add to that the huge costs of transportation of these goods and you know why we are still behind countries like China. |
| |
| Although the components are state-of-the-art, costs are slowly killing the Indian challenge to China, the world leader. Complex custom and taxing regulations, insufficient airfreight capacities, shortage of outbound ocean carriers as well as under-developed cross country roadway’s infrastructure hits the industry hard. |
| |
| The opportunities for India are endless. Modifications in Custom’s and taxation laws, coupled with easing the investment process for foreign corporations will not only aid in speeding up their investments in India, but also act as a catalyst in attracting a larger number of industry players to the country. Policies for the Component Manufacturing industry will not only help in creating local interest, but will also ensure that there are enough components for the EMS industry when they set up their bases in India. India is moving in the right direction; all we need are a few more right turns, than wrong. |
|
English
