“The discussions that we have had with our global customers (laptop and tablet brands) is that we feel we have almost matched the China manufacturing cost,” Dixon Technologies managing director Atul Lall told analysts last week.
Karbonn chairman Pardeep Jain said the key to matching China’s manufacturing cost has been the government’s production-linked incentive (PLI) scheme.
Lall said Dixon is expanding its lighting exports to new customers in Germany and the UK. It will soon start shipping out mobile phones for anchor customers such as Motorola and Nokia, he said.
Domestic pioneers
It will also start exporting components like inverter controller boards for air-conditioners, which are sold locally to Daikin, Lall said. Dixon expects export revenue of Rs 2,000-2,500 crore this fiscal year, compared with Rs 1,000 crore in FY23, and exponential growth thereafter.Lall told ET Dixon has to match China manufacturing costs to be successful since there is no import duty on products such as laptops and tablets. “We achieved this parity in manufacturing cost by sending our teams to large Chinese contract manufacturers to understand their operating procedures and cost management, against which we have benchmarked our operation,” he said. “We will also invest more in automation to achieve this parity across products.”
Brands like Apple have been exporting products such as mobile phones from India but that’s from plants set up by its global manufacturing partners, such as Foxconn and Flex. Samsung and LG, meanwhile, have set up their own factories for exports.
This is the first time global brands, including Chinese-owned ones such as Xiaomi, are looking at exports from Indian contract manufacturers, executives said.
Tata group’s contract manufacturing arm, Tata Electronics, is also entering the arena by acquiring Taiwanese contract manufacturer Wistron Corp’s India operations, which assembles iPhones. This is the first time an Indian entity will produce iPhones both for Indian and global markets, an executive said.
While Apple declined to comment, an email sent to Tata remained unanswered till press time.
“While global brands are indeed looking at India with greater interest for manufacturing, as part of their China+1 strategy, it is important to build the component manufacturing base here too to make it viable,” said Karbonn’s Jain. The group is a contract maker for smartphones with a partner.
Havells India recently ventured into the design and contract manufacture of air-conditioners for global brands in markets such as West Asia and the US. Next in line will be washing machines, with the company targeting Rs 1,000-crore export revenue in the next few years.
