'US trade deal mother of all opportunities'

NEW DELHI: Dixon Electronics is seen as India's Foxconn and has grown its manufacturing footprint exponentially over the last few years, securing contract- manufacturing orders from some of the world's biggest giants. As Trump tariffs shake up the global manufacturing ecosystem, Dixon chairman Sunil Vachani tells TOI in an interview that "There is no better place than India right now because we have a large pool of manpower, we give frugal and low-cost manufacturing, we offer high productivity, and all these are backed by strong govt incentives." Excerpts:

What is the impact of US tariffs on India's manufacturing ambitions?

To be honest, the initial opportunity that came our way was when Donald Trump was elected in his first term. Then, everybody was looking at an alternative to our neighbour (China). But, at that time, the Indian industry was not very well prepared and we missed that opportunity as Vietnam surged ahead. This time, the opportunity is much bigger and India is much better prepared. The four years of smartphone production-linked incentive (PLI) scheme helped the Indian industry create a very large scale. As Dixon, we were hardly producing a few million sets of smartphones per year until a few years back, but led by PLI, today we have a capacity to produce almost 70 million devices annually. Our industry's scale (in smartphones) today is comparable to what we see in our neighbouring country. Moreover, our industry is also investing in backward integration. If India really emerges as one of the first countries to have a bilateral trade agreement with the US with zero tariffs, this will be the mother of all opportunities.


People talk about Dixon as the next Foxconn. Do you think that scale can be developed?

What do you need for creating a large scale? You need a large pool of trained manpower and modern machines and make sure to achieve the best productivity. India's strength lies in having a large pool of manpower, which is waiting to be employed. All the industry needs to do is invest resources to give requisite training and skills to these people, so that they become extremely productive.

Should we partner with suppliers from China, Vietnam and Taiwan?

As an entrepreneur, if I go and try and reinvent the wheel and develop technologies on display and camera modules, it will take me a very long time. Unfortunately, our industry doesn't have time on our side. Last time we may have lost this opportunity, but this time we don't want to lose it. So, the quickest way and the most efficient way is to tie up with component suppliers, who are already vendors to our customers. We have to agree on a JV structure, which is acceptable to govt. Because security considerations are the most important factor. They will do their vetting, they will do due diligence, and only then will the projects get approved. So, after clearing those hurdles, any partnership that comes through will be a win-win because the Chinese are getting access to a market, which they are not going to have if the tariffs hit Beijing.

Your view on China?

If you see our story of smartphone manufacturing, we were broadly importers around ten years back or so. For us, this journey has just begun. China is far, far ahead of us in this journey. They've developed huge strengths, including in backward integration and component ecosystem. Over a period of time, we can do it on our own..