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Indian Phone OEMs To Invest $115 Million On New Factories

September 17, 2015 - Written By Kishalaya Kundu

With the Indian smartphone market getting bigger and more lucrative by the day, more and more vendors are looking to start manufacturing their gadgets in the country to take advantage of the large tax exemptions being doled out to them by the federal government. While a number of multinational electronics companies like Samsung and LG had already been operating manufacturing facilities in India for televisions and other high volume electronics, the past year and a half has seen a proverbial gold rush from companies of all descriptions jumping on to the so-called ‘Make in India’ bandwagon, launched last year by the government. Companies like Sony, Microsoft, Motorola, Asus, HTC, Xiaomi, Foxconn, Vivo, Gionee, Micromax etc. have all either invested in manufacturing plants in the country, or entered some sort of a contract manufacturing agreement with OEMs like Foxconn, and started selling their ‘Made in India’ smartphones in India and beyond.

While many parts of the country have seen investments flow in, the South Eastern state of Andhra Pradesh has been particularly successful in attracting capital from tech companies. While the world’s largest contract manufacturing company, Foxconn, has already opened a manufacturing plant in the state to roll out Xiaomi’s smartphones from, one of India’s largest financial publications, Economic Times, is now reporting that three Indian smartphone makers, Micromax, Karbonn and Celkon, have already inked the deal with the Andhra Pradesh government to set up manufacturing plants in the state. According to Economic Times, the total amount of investment from the three firms taken together, is around Rs. 7.5 billion ($115 million). While Micromax has already been making some of their phones in the country, the current round of investments seems to further indicate the bullishness of the industry as a whole, on the state of the Indian mobile market.

Quoting Mr. Karthikeya Misra, the industries’ director in Andhra Pradesh, the Economic Times is further reporting that the state government is negotiating with mobile handset and component makers like Lava and Intex to invest in setting up manufacturing units in the state. The government there is apparently looking to turn the state into a hub for the production of smartphones and related components. The state government reportedly believes that the combined output of all manufacturers in the state would be in excess of 7 million units per month, once all the facilities are up and running at full capacities by the end of 2016. While Karbonn and Celkon are almost exclusively phone vendors, Micromax has recently ventured into consumer electronics and audio/video products. The company will reportedly make its whole range of smartphones, tablets, LED TVs and computer monitors from its new facility, which is to be situated near the Renigunta airport on the outskirts of Tirupati.