Tata Electronics, a significant contributor to the assembly of Apple iPhone enclosures in India, has embarked on a new venture. The company is now involved in the development of sophisticated and precise machinery essential for the production of iPhone casings. Collaborating with two Indian manufacturers, Tata Electronics is diligently cultivating these capabilities. Notably, the company aims to transition from importing such machinery from China to exporting its own advanced machines, marking a strategic shift in its operations and potentially impacting the global industry landscape.
Photo: Bloomberg LINK
The machines crafted by Tata Electronics are meticulously designed for seamless integration into the production lines of contract manufacturers, catering to industry titans such as Apple. This strategic alignment holds the potential to propel the government's ambitious target of attaining $300 billion in electronics exports by the year 2025. Widely regarded by experts as a watershed moment for Indian manufacturing, this initiative serves as a testament to the nation's adeptness in producing intricate machinery, thereby diminishing reliance on external suppliers.
According to sources, Indian manufacturers exhibit differing levels of preparedness to execute this strategic plan. This concerted effort harmonizes with the company's overarching global strategy, which prioritizes the gradual reduction of reliance on lower-tech components in favor of more sophisticated alternatives. The aim is twofold: to diversify the supply chain and to mitigate risks stemming from global disruptions. Simultaneously, this initiative seeks to foster the growth of domestic manufacturing capabilities.
While Computer Numerical Control (CNC) machines are extensively utilized across multiple sectors in India, there exists a notable gap in the proficiency of domestic manufacturers to fully capitalize on CNC technology for precision components, as reported by a source. Recognizing the imperative to diversify and de-risk the supply chain, stakeholders including the government, industry giants like the Tata Group, and individual companies are prioritizing this agenda, as highlighted by the source.
According to an official disclosure, the Tata Group currently operates approximately 40 production lines at its facility in Hosur, while also fostering partnerships with two companies, one located in Pune and the other in Bengaluru. However, while the prospect of exporting the machinery holds promise, it may require a significant period before it materializes into tangible reality, as hinted by one of the sources.
Other Industry Giants’ Opinion on Tata’s Move
"A person familiar with the developments told the financial daily, 'The Tata Group is testing these machines in a staged manner at their Hosur facility.' The objective is to grow more of its local capability, as the company aims to develop the ecosystem in the country, rather than just building enclosures. These machines are one of the many inputs that go into making a component or an enclosure, and the company is looking to reduce its exclusive dependence on certain parts."
Ajai Chowdhry, the co-founder of HCL, emphasized the high demand for casings in the electronics industry.
He stated, "Everybody wants casings. If Tata Group is able to do import substitution and they're able to make these machines in India, it will create an industry because so many people want casings. Anybody who wants to make a phone or a tablet in India needs casings and if they're able to adhere to Apple's stringent standards, it would be a high-quality machine in itself."
"It's a maturity curve," he explained. "India has a while to go before the export happens. First, the Tata Group must be able to make them good enough for them to use. A lot of machines from India do go overseas, but this one again is about precision stuff, which is so complicated, so it's a maturity curve that will take time."
Pankaj Mohindroo, the chairman of the industry body India Cellular & Electronics Association (ICEA), emphasized the significance of developing key capital goods for the industry.
He stated, "We are working on developing India as a major assembling and components hub for electronics' capital goods."
India Recent Reduced Toy Imports from China
Till recent years, India's substantial demand for toys has primarily been met through imports, predominantly sourced from neighboring China. However, there has been a significant shift in this trend, with India experiencing a remarkable reduction of approximately 70 percent in toy imports from China. This transformative shift in the market dynamic is highlighted in a case study titled 'Success Story of Made in India Toys,' conducted by the Indian Institute of Management (IIM) Lucknow in collaboration with the Department for Promotion of Industry and Internal Trade (DPIIT). The study reveals an impressive growth trajectory for the Indian toy industry, particularly evident in the fiscal year 2022-23 compared to FY 2014-15. Noteworthy statistics include a notable decrease in imports by 52 percent, a substantial surge in exports by 239 percent, and an overall enhancement in the quality of toys available in the domestic market.
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