Ever since Make in India was launched by India Government as a mission to foster high-tech manufacturing in India, mobile phones have been among a few product categories at the centre stage. In fact, if we have something to showcase today as a success story of Make in India, it is mobile phones.
We have now more than 80 percent of mobiles manufactured / assembled in India and barring a few high-end smartphones and some very lesser known brands that emerge essentially to test the waters, all manufacturing / assembly will take place in India.
However, we have casually linked manufacturing in India with consumer benefits. This is not the case at all. Manufacturing in India has no direct benefit for the consumers. This is where the orientation of the program went in the wrong direction. The expectation that local manufacturing would benefit Indian consumers was wrong. Since there are no benefits to the user community, there is still some confusion among the consumers. It is difficult for the manufacturing industry to put it forward as a selling point.
Make in India is all about industry and macro-economic benefits. While for the industry it lowers the dependence on the vast ecosystem, job creation and reduced imports bill lowering the Forex burden, eases out some of the major macro-economic challenges. At the same time, manufacturing locally gives opportunities to employ the know-how gained in higher order skills in R&D and product development.
Government alone cannot be held responsible for setting this type of orientation for device manufacturing in India. To some extent industry also has to bear the responsibility. Led by Chinese brands, Make in India was used as a marketing pitch to give a sense of localisation so that these brands are not seen as foreign brands giving any sort of competitive edge to the domestic counterparts. In this hurry, quick assembly floors were set up to earn the Make in India label with little focus on value add.
One might argue that this is how any nation authors the manufacturing journey and gradually ups the ladder starting from Trading, Assembling, Manufacturing to finally Engineering, which has to maximum value addition. This is absolutely rationale, provided there is a journey in continuity. The Chinese brands have no reason to consider TAME framework of long tail manufacturing and they will drive their manufacturing/assembling agenda as per their business exigencies. With the level of understanding and visibility, it is unlikely to expect Chinese brands going beyond Manufacturing, that too with limited exposure.
On the other hand, Indian brands have been losing grip on the market. They are at the moment on a back foot attempting to secure their position, whatever left, in the market. They neither have the resources nor does it fit in to their scheme of priorities to consider having a long tail manufacturing vision. Lava, to some extent, has exhibited deeper commitments in developing manufacturing competencies, but can their eroding market position continue to give them the comfort of having an end to end focus.
The entire Make in India initiative needs an overhaul starting from its orientation. It has to be made clear among the stakeholders including consumers, that the program will not be having any direct benefit to them. Rather, developing manufacturing capabilities will help the country have a better macro-economic outlook that would be enabling more jobs across the levels and there would be diversification of economic portfolio in the country.
This orientation will at least make all of us realise that manufacturing is not for earning local labels, but a long horizon consistent activity that should aim creating strong domestic brands as well as industry built upon a credible intellectual property.
The cues can be taken from the success story India authored in the case of services where knowledge and not the execution was key in establishing a mammoth service outsourcing industry that could be engaged by global brands across the globe. The key to success was knowledge that the workforce had acquired in the country to offer services.
Similarly, manufacturing has also to be knowledge driven. It has not to be only for the purpose of setting up ‘finishing’ assembly lines. Rather, fundamental manufacturing base has to be developed pillared on the strong foundation of knowledge that would come from the product and intellectual capital to be enabled through Make in India.
Faisal Kawoosa, head – New Initiatives CMR
Faisal Kawoosa drives new initiates at CMR. Having over 13 years of research and consulting expertise in technology domain, he specifically covers Telecom, IP Technologies, Devices, Electronics, Start-ups, Incubation, Applications and other emerging technologies.