New Delhi: Handset maker Micromax will invest Rs 300 crore over the next few months as it sets up three new manufacturing units in India to ramp up domestic production and reduce dependence on imports from China.
The new plants will be set up in Rajasthan, Telangana and Andhra Pradesh and will become operational over the course of next year.
“We have been allotted 20 acres land in Telangana and the civil structure is almost ready. Similarly, in Rajasthan, we have got 25 acres land and construction will start in a few days. Tirupati will also start soon,” Micromax co-founder Rajesh Agarwal told PTI.
He added that once all the units are functional, the company will have a capacity of about 4 million units.
“We will be able to provide employment to some 3,000-3,500 people in each factory… This is more than ‘Make in India’, it’s about making India a hub for electronic manufacturing as our electronics (import) bills will overshoot our crude bills in the next few years given the heavy demand,” he said.
Agarwal added that Micromax will invest about Rs 100 crore on each of the new projects.
Currently, the company has an assembly unit in Rudrapur, Uttarakhand that produces about one million units. This accounts for about 30-35 per cent of its requirement and the remaining are imported from China.
“The intent is to manufacture in India. We see that as an industry by 2017, we will start making batteries and other components here in India. It will only mature in the future and I am sure we can export to other markets from India as well,” he said.
Global handset makers like Samsung and domestic players like Spice have assembly units in India. International players like Xiaomi, Gionee and Asus have announced assembly units in partnership with electronics major Foxconn in Andhra Pradesh in the recent past.
Handset makers are looking to tap the multi-billion dollar opportunity in India, which is one of the fastest growing smartphone markets in the world.
“The Fast Track Task Force has a target to cross 500 million mobile phone manufacturing, employment to 15 lakh plus and a component industry of 50,000 crores besides other terms of reference by 2019-2020.
“We are witnessing strong green shoots already. Manufacturing value will grow 95% in 2015-16 compared to 2014-15. We are confident of achieving, in fact crossing the target set out for 2019-2020 by that time,” Indian Cellular Association (ICA) National President Pankaj Mohindroo said.
Domestic brands, particularly Micromax and Lava, will play a leading role in spearheading this task of nation building, he said.
ICA also expects global giants like Foxconn to play an equally significant role, he added.
In December last year, government had set up a joint task force, which included industry representatives from Samsung, Microsoft and Lava, to rejuvenate nation’s mobile phone manufacturing ecosystem with a view to achieve production of 500 million units of mobile handsets by 2019.
Lava is also looking to bring the entire manufacturing ecosystem to India. It is investing Rs 2,615 crore over the next seven years to set up two manufacturing units in India.
“Our plan is to expand exporting to other countries next year and hopefully, by 2019, we will export to China itself,” Lava International CMD Hari Om Rai had said.
The Indian handset industry is poised to overtake the US as the second-largest market in next few years.
According to research firm IDC, smartphone shipments in India grew 21.4 per cent in the July-September 2015 quarter to 28.3 million units, buoyed by a three-fold jump in demand for 4G-enabled devices.
Samsung was the largest player with 24 per cent share of the smartphone market, followed by Micromax (16.7 per cent), Intex (10.8 per cent), Lenovo Group (Lenovo and Motorola at 9.5 per cent) and Lava (4.7 per cent.)