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Electronics Production | March 09, 2007

India next hot EMS destination?

The Indian Union Ministry of Communication said that foreign direct investments worth over $ 3.5 billion has been committed by various players in the telecom and IT sector in the past two years. While some of the projects for which the investments were committed have been completed, the others are bringing in the money in phases over the next two to three years.
The major investments include $ 250 million being pumped in by Swedish equipment major Ericsson for setting up a manufacturing plant for GSM mobile equipment in Jaipur and a research and development centre in Chennai. Nokia is investing $ 200 million for setting up a handset manufacturing unit and a global network operations centre in Chennai. Elcoteq is investing $ 100 million in Bangalore for setting up a telecom manufacturing unit and Aspocomp is putting in $ 200 million in Chennai for setting up a unit for producing high density interconnection gear. The unit will be operational in the second half of 2007. HonHai is bringing $ 110 million to Chennai to manufacture mobile handsets and electronic hardware. Samsung is investing $ 100 million in Chennai for manufacturing colour TVs, printers and LCD TVs. Commercial production in this unit will commence in August 2007.

IT major IBM has committed $ 6 billion over the next five years for expansion of software, services and customer-support and also funding the new service delivery centres in Bangalore and a telecom research facility in New Delhi.

Other major investments include $ 1.1 billion from Cisco for a number of initiatives and $ 2 billion from Vodafone for expanding the network of its recently acquired Hutchison Essar. These projects are in various stages of implementation.

With the telecom sector growing at over 5 million subscribers a year, gear manufacturers, handset makers and component production companies are making a beeline to get a share of the market. According to Government estimates, additional investments of $ 2 billion are expected this year.

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