Sunil Vachani’s Dixon Technologies is showing global manufacturing can happen in India
India has been in a tough economic state for quite some time now. The dreams of 5 Trillion-dollar economy and self-reliant India seem like a distant one, especially with the country’s growing inability to retain foreign direct investment due to a number of factors, mainly concerning the political environment and economic instability. However, there’s no doubt as to how crucial the role of foreign direct investment is for the long-term development of the country and realisation of its goal to make India the global manufacturing hub.
With the ongoing farmer protest and Modi government’s fascist handling of the situation, the world has lifted their eyebrow in calls of human rights violations and mishandling by the government. As alarming as this is for a number of factors concerning the country, one of the worst affected areas would be the foreign investment since reputation plays a grave role in the area in question. And since the political environment’s stability seems a little too uncertain at this point, any little hope of economic growth that could pave way for the world to see India as the global manufacturing hub is all we need right now. Well, Sunil Vachani’s Dixon Technologies seems to be that hope.
Sunil Vachani’s start-up that started with an investment of USD 35,000 thirty years ago has now taken the face of an electronics empire, claiming a net worth of $2.5 billion and a manufacturing capacity of about 50 million smartphones. India’s growth pattern has been evident to us all with the shift of primary sector in GDP successfully taken over by the service sector, leaving behind the manufacturing sector, which again is our pathway to global economic growth. This incredibly large manufacturing capacity by the Vachani’s Dixon technologies opens the door to some great opportunities for the country’s growing manufacturing sector, globally.
India’s plans of self-reliance come handy with the plans of Dixon technology to “bring about a mindset change that global manufacturing can happen in India.” The increasingly growing domestic demand for smartphones has been the source of booming revenues and profits for the country, with the capacity building taking place at every new turn. As Mr. Vachani rightfully claimed, “This is only a start.” And a good one, indeed. The billionaire while setting foot in the grim manufacturing sector of the country three decades ago, started with 14-inch televisions and has only grown since.
The growth of the company can be credited to their constantly advancing ventures along with Modi government’s policies to boost the manufacturing sector through the imposition of heavy tariffs on products like imported smartphones and cash incentive program. This helped local producers, such as Dixon Technologies, pick up pace in the domestic market through large scale manufacturing, resulting in economies of scale and thus, lesser costs. This also helped in the construction of new homegrown device makers and global contract manufacturers like Foxconn Technology Group and Wistron Corporation.
The current situation with tensions between US and China presents nothing less than a striking opportunity for India to claim its name in the global manufacturing market, with companies like Dixon Technologies paving its way further. It is so because the world’s biggest companies, including Apple Inc., realised how it is much wiser to not concentrate production in only place, after the US-China tensions. And with Dixon Technologies increasing its production capacity every year, it shows the world the opportunities India upholds within itself. Even the road is a very long one, with China as the leading parallel, a good start would mean an easier path.
Reports from various sources suggested that Sunil Vachani’s Dixon technologies increased its capacity production of smartphones from 2 million smartphones a month, last year, to about 4 million smartphones the very next year and plans to further increase in the coming ones. This also called in remarks from one of the leading companies of the world, Deloitte, expressing India as a viable alternative to the China supply chain, saying “India is well qualified to be the world’s alternative to the China supply chain.” P.N. Sudarshan, partner at Deloitte India also said, “Once component makers move, vibrant manufacturing clusters will form.”
Sunil Vachani’s Dixon technologies manufacture televisions for Xiaomi corporation, washing machines for LG electronics, lighting products for Philips and smartphones for brands like Panasonic Corporation and Samsung Electronics company. The company gained recent success after its Initial public offering back in 2017 and can credit its huge chunk of profits to the smartphones industry. This also allowed many other Indian corporations to construct and make their place in the phone manufacturing market. The increasingly growing market is expected to reach a customer base of 859 million people by the year 2022. As for Dixon technologies, the share of the phone industry in the company’s profit share already rose by a whopping 32% in one year, starting from 12% in the last year. This prominent growth share is symbolic of the sector’s leading opportunities. If the country’s infrastructure development goes as planned by the year 2022, the country could see a revolutionary change in the manufacturing sector of the country both domestically and globally, as suggested by reports from industry experts. The proclaimed declaration to create over 100 million manufacturing jobs in the country would ensure placement of India’s manufacturing industry in the global market, bringing closer the dream of becoming a manufacturing hub.
The company is also preparing itself to export abroad for large brands like Motorola that recently contracted a deal with the company to produce devices for the US market. A similar deal was also made by Finland’s HMD, taking company’s next year manufacturing plans to 75 million units in the year. A further expansion into categories of tablets, laptops and wearable also seems like a reasonable feat for the company in the near future. Well, with big promises and big policies that came our way, we can only hope their transparent implementation would take India where it belongs to be.