Zoom In: Pathways to Manufacturing Growth

The Hindu BusinessLine: September 27
Developing a plant set for light pick-up truck manufacturing in April 2016 in Andhra Pradesh’s exciting Sri City, Isuzu’s Deputy Managing Director in India said, "There is a huge potential for local sourcing, and those who supply us with parts here are candidates for supply to our worldwide operations…It will be a manufacturing hub for emerging markets.” Isuzu also manufactures SUVs at a plant in Chennai.
  • Mercedes-Benz will invest upwards of $300 million to upgrade a plant in Pune after overtures from Maharashtra’s Chief Minister, including a streamlined environmental clearance. (The Economic Times)
  • Auto manufacturing has been seen as the centerpiece of Modi’s Make in India program. A government plan released last month called for fourfold growth in auto manufacturing output in the next 10 years. The plan said, ““The automotive industry can be termed as the mother of the manufacturing sector in an economy, as its fortunes directly impact the fortunes of several related manufacturing industries.” (Siddharth Vikram Philip and Anurag Kotoky, Bloomberg)
  • One writer suggests that the glut of Chinese smartphone makers who are looking to break into India might look to the favorable case of auto manufacturing growth in the early 2000s led by favorable government policy, but the smartphone industry is a bit more dynamic than the auto industry. An announcement from Foxconn about future manufacturing plans has raised hopes, but it and others may struggle to break out of the now-standard practice of assembling in India parts shipped in from China. (Quartz)

Solar energy production is promising in India (driven by a National Solar Mission that requires 100 GW of solar power generation by 2022) and accordingly, Chinese solar manufacturing company LONGi has tied up with Andhra Pradesh to the tune of $250 million to build a plant in the state. The Chief Minister will happily put his single-window clearance procedure to the test here. (The Economic Times)
  • "’I want to create a solar manufacturing hub in Andhra Pradesh. With the interest in the sector from solar manufacturing companies, I am hopeful that more than 50 percent of India’s manufacturing capacity will be set up in Andhra Pradesh in the long term. Currently, we share 10 per cent of the country’s target for solar power,’ [Chief Minister Chandrababu] Naidu said.” (Khaleej Times)

Innovation and Industry Spotlight

Multinationals are serious about India’s lower tier cities. Audi (a luxury brand if there ever were one) deployed a mobile showroom that it plans to take to over 30 cities in the next year. (The Hindu BusinessLine)

The global design director of British house Topshop has called India a “huge market for international brands,” while praising its “rich” design heritage. Classically something in between a semi-luxury and luxury brand, it has entered India via e-commerce platform Jabong. (ETRetail)
  • H&M had similarly deep enthusiasm about the Indian market ahead of the launch of its first brick and mortar store (ETRetail)
  • Global brands such as Zara, Forever 21, and Sephora, are driving foot traffic at India’s large malls, boding well for the Topshops and H&Ms of the world if they are willing to take some risk. (Economic Times)

Mobile-first breaks into the publishing world. A former Penguin India publisher along with the founder of Firstpost have launched a mobile-first publishing house, Juggernaut Books, with funding from the likes of Infosys’ Nandan Nilekani. Recall that India had been identified as one of the few places in the world where print media is still profitable, but the lure of developing a mobile publisher was too much to pass up. (iamwire)

Modi Visits Silicon Valley

“Google today has made teachers less awe-inspiring and grandparents more idle. Twitter has turned everyone into a reporter. The traffic lights that need to work the best are on CISCO routers.” – Narendra Modi at a dinner with Silicon Valley leaders (The Hindu)

An oratorially in-form Narendra Modi visited New York City for the UN General Assembly and paid a visit to San Jose, the latter to meet with tech company CEOs and the Indian-American community there. He toured Tesla, had a town hall at Facebook and Google, and a meeting with Apple CEO Tim Cook. This was not to take away from a stadium event featuring 15 congresspersons on stage to fete him, not unlike his event last September at Madison Square Garden or a similar event in Australia.

Digital India was injected with fresh pledges…Google will help offer free Wi-Fi at 500 railway stations and will develop the capability for Indians to type in 10 different languages. Microsoft will join with the government to deliver internet access to 500,000 villages. Qualcomm will invest $150m in startups focused on mobile development and technology consonant with Modi’s Smart City program. (YourStory)