India natural choice for manufacturing: Vachani

The component and electronics industry is experiencing its own 'Y2K' moment, as countries continue to look for an alternative location for setting up their manufacturing units, said Sunil Vachani, cofounder and executive chairman, Dixon Technologies.

- AASHISH ARYAN

"India is a natural alternative. We have the largest market for some of the products we manufacture, we have a large pool of labour, and we can excel in design and manufacturing. We have shown that our manpower can be the most productive in the world than many other countries if they are given the right inputs," Vachani said at the second edition of Business Standard Manthan in New Delhi on Friday.

Of the $140 billion worth of electronics products consumed in the country, domestic units make products worth $110 billion. Information and communication technology (ICT) products also make up the third-largest category of goods in the export basket of India, with the country set to export ICT products worth $40 billion, of which mobile-phone exports alone will be $20 billion, he said.

"Now the question that needs to be asked is: When do we deepen the manufacturing? What will happen to value addition in all the products? When do we start designing these products? I think now these are the questions to ask," he said.

Vachani of Dixon Technologies, which is among the largest home-grown white label electronics manufacturers, said the component-manufacturing ecosystem would come to the country over time and with patience from the electronics industry.

"I wasn't around that time but I am sure the same question had been asked when Maruti started manufacturing cars in India. A lot of people would have then said that right now this is only assembly. When is the component ecosystem coming? But today, maybe after about 40 years, the auto components sector is exporting products all over the world," Vachani said.