To paint a picture of the large subcontinent of India, I refer to Octavio Paz, the Nobel laureate, poet and onetime Mexican ambassador to the country. In In Light of India, Paz writes: “The first thing that surprised me about India, as it has surprised so many others, was the diversity created by extreme contrast: modernity and antiquity, luxury and poverty, sensuality and asceticism, carelessness and efficiency, gentleness and violence; a multiplicity of castes and languages, gods and rites, customs and ideas, rivers and deserts, plains and mountains, cities and villages, rural and industrial life, centuries apart in time and neighbors in space.”
Another contrast I experienced on a recent trip there presented itself as a question in my mind. It came as I exited the terminal at Indira Ghandi International Airport in New Delhi at 2 a.m., walking with my luggage and searching for my driver, whom, I was told by our client, would be bearing a nameplate.
I stepped outside. The area immediately surrounding the terminal was dirty. Stray cats and dogs roamed freely across the open ground. The smell in the cool, early-morning air was…interesting. Dozens upon dozens of taxis, far more than what seemed necessary at that hour, idled nearby. The drivers, each ventured far from their respective taxis, visiting with one another.
This activity played out more like a recurring nightly get-together than a disciplined, eager-to-earn-a-rupee, business endeavor designed to place food on the table and build wealth.
My driver found me before I found him. (I suspect a tall, white male with gray hair wearing business casual stood out starkly among the sea of dark hair, colorful saris, turbans and sandals). He opened the door. As I entered I thought: Is this really a good place to design and build VoIP equipment?
In 1991, India found itself nearly bankrupt with no more than three weeks of foreign currency left in its reserves. To help address this, the government began deregulating certain enterprises. Enter Aroun Shourie. Although occasionally controversial, Shourie is one of a group of well-known thinkers changing the Indian mindset on deregulation. Shourie is minister of state and executioner of privatization in the recently displaced BJP-led coalition government.
India continues its privatization efforts to this day, inviting NGOs to invest and help manage, or to purchase outright, previously government-run enterprises, while continuing to implement measures to further open its economy to the world.
No one can deny India is the last great emerging market. But unlike China, which has grown tremendously over the past 20 years, India still lacks many basic infrastructures. Phones, electricity, water and roads can challenge even the most veteran traveler. Take, for instance, cellphones. Whereas one can purchase a handset in China and rely on using the phone anywhere in the country, India’s infrastructure can necessitate purchasing a new phone for each of the nation’s states.
Meanwhile, China will soon, if not already, lay claim to having one of the most extensive railroad distribution systems in the world.
India is the world’s largest democracy, and benefits from its standing as the third largest English-speaking nation in the world, after the U.S. and the U.K. That said, less than 4% of India’s population speaks English. Some might say there is also wide corruption in all levels of Indian society. So, in some instances, you could be taken advantage of while doing business in India and not know what is going on. (Get the double meaning?)
In his book, The Corrupt Society, Indian author Chandan Mitra compares that nation’s society today to that of one of Niccolo Machiavelli’s second-category societies mentioned in the 1505 novella, The Prince. In such a society, Mitra points out that India’s citizenry, while actively participating in the political process through elections, is primarily engaged in promoting its own ambition to the detriment of the common good.
Some say that if corruption did not play a significant role in the intricate bureaucracy of Indian government and business, the system would not work at all. The rationale: because of the corruption, plans are drawn and executed and relationships are appreciated by way of greased palms, so as to begin anew another day.
Where NASSCOM (National Association of Software and Service Companies) has been able to move India’s software industry into the world markets, India’s hardware manufacturers are struggling to find footing. Granted, there are some terrific, large companies. However, relative to electronics, seemingly capable contract manufacturers are still finding it difficult to be acknowledged in the global markets . let alone compete.
With more than a billion people, certain reasoning can support India keeping its internal markets closed. However, because the Indian EMS sector has not yet begun to develop the required concentration of capital and it has yet to prove it can develop and sustain world-class electronics hardware design and manufacturing expertise on a wide scale, the quality of its capabilities is perceived as, and in many instances is, unable to meet expectations beyond its borders. Perhaps a closed market cannot have a true concept of quality.
In spite of this, India’s EMS sector is making strides. We have worked with a number of truly professional Indian design houses and contract manufacturers. However, without this historical knowledge, any executive would be remiss if they did not perform extra due diligence when evaluating potential Indian partners.
Since the late 1990s, our firm has worked with European and North American OEMs doing business with Indian EMS companies, and numerous Indian EMS companies looking to become more competitive on a global scale. Everyone wanted to know: How can India evolve as a viable EMS destination source and how can India promulgate its own EMS capabilities to the global market?
The following highlights are what we view as the essential activities and opportunities India must continue to seek to be a successful destination for EMS. Success is India’s to lose. We propose India focus on four target areas:
- International and regional EMS industry organizations
- Indian government
- Private sector
- Universities and technology/research centers
Obviously, India’s success depends on far more than this outline. However, we offer this high-level blueprint to help all stakeholders develop a sound grasp for the types of activities India must accomplish to perform successful EMS on a global scale.
International and India-based EMS companies must act as a clearinghouse, and provide specialized services and advice in helping to launch domestic EMS enterprises. The SMTA, with global headquarters in North America and a chapter in New Delhi, is a perfect example of this sort of industry guidance. Perhaps it is not too much to expect that such organizations can also assist in developing and executing workable frameworks for revising and reforming legal and regulatory tools to bring India’s EMS sector in line with the world’s.
Such organizations must be encouraged to coordinate and cooperate more effectively with national and regional Indian EMS businesses. Hidden agendas and selfish motives, as weeds that inhibit a garden from thriving, must be removed so that the beginnings of a solid foundation can take hold. Objectives for improved coordination and cooperation must include:
- Combining of electronics hardware sector-related expertise and resources
- Improving public knowledge of EMS
- Understanding the role of EMS as it relates to India’s potential
- Understanding the rewards of participating on a global level