There is a race to become the Number Two amongst Indian mobile phone manufacturers. Read the news linked below. Two Indian "manufacturers", viz. Intex and Micromax are the top runners. This could be an interesting hair-raising contest, except that it is a fake contest, a proxy race, because both these companies are mere traders of Chinese stuff, just the way the Number One "manufacturer" Samsung is. They are not manufacturers by any stretch of the interpretation of the term.
Isn't it shameful that each of these companies, Intex and Micromax, is quoting import data to prove that it is a bigger manufacturer than the other? These so called manufacturers import fully assembled mobile phones, with packaging and even the plastic wrapping done in China. Their manuals are printed in China as well and placed in the respective boxes in the foreign land. How can they be called manufacturers of mobile phones, when all they do is trading of bought out wares? Such contract manufacturing in China or a few other countries is now the norm for Indian "manufacturers" of almost anything that we use in our daily lives - light fittings, LED or CFL lamps, switches and sockets on our walls, ceiling fans or table fans, kitchen gadgets and utensils, plastic trays and buckets, holy images of our deities and firecrackers, containers and photo frames, most of the furniture, carpets and mats, paintings and vases, Hawaii chappals and shoes, all electronic gadgets, safety razors and what have you. Yet, I am sure the importers of these goods would love to call themselves manufacturers. Even the facade of screw driver technology is gone. We are now in a crate-uncrate phase of the fallacy of Indian manufacturer. Bring in containers of readymade packaged goods and sell it under an Indian name. Even the cardboard-packing is done abroad along with the price labelling as a part of the new manufacturing paradigm.
Saying that Apple or Walmart do the same is not going to solve our problem of unfathomable unemployment and poverty. Let's us ask why Intex and Micromax do not manufacture mobile phones in India. After all, four crore handsets annually is a reasonable quantity to set up a factory for. Micromax claims that it had imported 9.7 million phones in the third quarter of this year and Intex imported 8.4 million. Given that we have at least three other Indian mobile phone brands, which are doing good business, we are probably importing about seven to eight crore "Indian" mobile phones annually from China. Wouldn't such a huge volume make a local manufacturing base even more viable? One would think that contract manufacturing in India could be a robust business proposition given the volumes we need locally.
What is holding them back from setting up large world-class factories in India? Is it license-permit raj? Why does such a Raj exist even after decades of claims that we have done away with it? It was probably easier to dismantle the British Raj. Is it lack of skilled manpower? Why do our ITIs continue to churn out carpenters and fitters, when we need assemblers and testers in microelectronics? Is it lack of allied and supporting businesses? I have learnt that if a mobile phone manufacturer in China wants one million pieces of a tiny screw or a rubber gasket, he walks into the next street and orders for it and it would be delivered the next morning! If he wants one million pieces of molded plastic frames or covers, he does the same. And he does have to work a minute harder even to buy even a million pieces of hi-tech LCD displays. What can make such an ecosystem for manufacture develop in India? Well, how about the first step towards it?
Don't worry about an uninterrupted power arrangement. The entrepreneur will set up his own DG set. Don't even bother to provide cheap rail transport. He will hire a road container service. Don't worry about laying shiny roads to his doorsteps. He will work around such obstacles. Also, protect him from hafta-collectors, both the political and the criminal type. Make it easy for him to buy land. Just help him by ridding him of the paperwork and of running around in the corridors of powers, dancing circles around the factory and excise inspector and the taxman and labour-law enforcer. Relieve the management of these things and let him apply himself to his business, which is already quite challenging and prone to risks and failures. Make it easy for him to raise money, to sign contracts and enforce them, hire and train personnel and to manufacturer, ship, service and make profits. That is what he is there for.
http://articles.economictimes.indiatimes.com/2015-09-12/news/66465809_1_intex-micromax-counterpoint-research
Isn't it shameful that each of these companies, Intex and Micromax, is quoting import data to prove that it is a bigger manufacturer than the other? These so called manufacturers import fully assembled mobile phones, with packaging and even the plastic wrapping done in China. Their manuals are printed in China as well and placed in the respective boxes in the foreign land. How can they be called manufacturers of mobile phones, when all they do is trading of bought out wares? Such contract manufacturing in China or a few other countries is now the norm for Indian "manufacturers" of almost anything that we use in our daily lives - light fittings, LED or CFL lamps, switches and sockets on our walls, ceiling fans or table fans, kitchen gadgets and utensils, plastic trays and buckets, holy images of our deities and firecrackers, containers and photo frames, most of the furniture, carpets and mats, paintings and vases, Hawaii chappals and shoes, all electronic gadgets, safety razors and what have you. Yet, I am sure the importers of these goods would love to call themselves manufacturers. Even the facade of screw driver technology is gone. We are now in a crate-uncrate phase of the fallacy of Indian manufacturer. Bring in containers of readymade packaged goods and sell it under an Indian name. Even the cardboard-packing is done abroad along with the price labelling as a part of the new manufacturing paradigm.
Saying that Apple or Walmart do the same is not going to solve our problem of unfathomable unemployment and poverty. Let's us ask why Intex and Micromax do not manufacture mobile phones in India. After all, four crore handsets annually is a reasonable quantity to set up a factory for. Micromax claims that it had imported 9.7 million phones in the third quarter of this year and Intex imported 8.4 million. Given that we have at least three other Indian mobile phone brands, which are doing good business, we are probably importing about seven to eight crore "Indian" mobile phones annually from China. Wouldn't such a huge volume make a local manufacturing base even more viable? One would think that contract manufacturing in India could be a robust business proposition given the volumes we need locally.
What is holding them back from setting up large world-class factories in India? Is it license-permit raj? Why does such a Raj exist even after decades of claims that we have done away with it? It was probably easier to dismantle the British Raj. Is it lack of skilled manpower? Why do our ITIs continue to churn out carpenters and fitters, when we need assemblers and testers in microelectronics? Is it lack of allied and supporting businesses? I have learnt that if a mobile phone manufacturer in China wants one million pieces of a tiny screw or a rubber gasket, he walks into the next street and orders for it and it would be delivered the next morning! If he wants one million pieces of molded plastic frames or covers, he does the same. And he does have to work a minute harder even to buy even a million pieces of hi-tech LCD displays. What can make such an ecosystem for manufacture develop in India? Well, how about the first step towards it?
Don't worry about an uninterrupted power arrangement. The entrepreneur will set up his own DG set. Don't even bother to provide cheap rail transport. He will hire a road container service. Don't worry about laying shiny roads to his doorsteps. He will work around such obstacles. Also, protect him from hafta-collectors, both the political and the criminal type. Make it easy for him to buy land. Just help him by ridding him of the paperwork and of running around in the corridors of powers, dancing circles around the factory and excise inspector and the taxman and labour-law enforcer. Relieve the management of these things and let him apply himself to his business, which is already quite challenging and prone to risks and failures. Make it easy for him to raise money, to sign contracts and enforce them, hire and train personnel and to manufacturer, ship, service and make profits. That is what he is there for.
http://articles.economictimes.indiatimes.com/2015-09-12/news/66465809_1_intex-micromax-counterpoint-research
Nice thinking Shubhranshu - does it prove that we, even Modi, are not up to it ?
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