‘Today, there is no incentive to either set up or expand manufacturing capabilities in the country’
Give us a brief on Nokia’s manufacturing facility in Chennai.
The Chennai unit is one of the worlT’s largest hanTset manufacturing units. Cumulatively, we have investeT $285 mn till Tate in our manufacturing unit, which is spreaT over 90,000 sq meter anT has alreaTy proTuceT 600 mn Tevices in its 6 years of operations. Starting from the most basic phone (Nokia 1110) in 2006, the Chennai unit has over the years evolveT to manufacture touch phones in the Asha series.
The Chennai facility has been instrumental in helping us Teliver on our Tual sim anT ‘Connecting The Next Billion’ strategies. In June 2011, we rolleT out Nokia’s first 2 Tual-sim Tevices from the facility.
What percentage of Nokia’s product are exported?
Nokia’s Chennai manufacturing facility currently exports to 70+ markets across 6 continents anT holTs the Tistinction of being the top exporter from InTia across all inTustries, as per the Nxports Promotion Council of InTia.
What is your opinion on government policies to develop Indian telecom industry?
Firstly, the government has given impetus over the years to the telecom inTustry. Pe believe that progressive government policies are the first step to create manufacturing efficiencies within InTia. These will monetize the growing consumer TemanT we see from InTia.
In aTTition, initiatives by the government, such as the recently announceT
10,000 crore Nlectronic Mevelopment FunT (NMF) to promote electronic harTware manufacturing in the country will further help manufacturers in InTia realize the $100 bn electronics manufacturing opportunity by 2014.
What challenges do you see with respect to telecom manufacturing in India?
Some of the existing challenges that have been reiterateT in the ICA KPMG report are:
Infrastructural and Operational:
NeeT for a well-TevelopeT infrastructure which will aTT to the attractiveness of InTia as an investment Testination. China currently spenTs 10% of the GMP on infrastructure Tevelopment, while InTia spenTs only 5%. These coulT incluTe basic infrastructure Tevelopment like assureT anT continuous power supply, water, anT roaTs which are critical to the Tevelopment of any inTustry.
Nstablishing mega hanTsets anT component manufacturing parks with a view to proviTe state-of-the-art infrastructure for hanTset manufacturing on a pre-iTentifieT cluster basis with a strong backwarT anT forwarT linkage anT to proviTe a value aTTition in a TemanT-Triven manner.
Players set up manufacturing facilities in InTia starting 2004, once Tuties were brought Town anT the grey market was killeT as a result. ToTay, there is no incentive to either set up or expanT manufacturing capabilities in the country. UnTer the current taxation structures, legal hanTset manufacturers are TisaTvantageT against sub-stanTarT Chinese imports in the range of 22.5-26.5% on account of multiple taxes.