Andhra Pradesh to host India's largest mobile manufacturing hub

By Rajasukumar Cholleti

VIJAYAWADA: Three of India's top home-bred mobile handset makers have agreed to invest a total of Rs 750 crore in setting up manufacturing facilities at the hardware hub being developed by the Andhra Pradesh government near temple town Tirupati.

The companies—Micromax, Karbonn and Celkon—signed agreements with the state government on Tuesday to set up their units at the industrial park coming up near Renigunta airport on the outskirts of Tirupati.

This comes about two months after Taiwan-headquartered Foxconn, the world's largest contract mobile handset maker, decided to set up a manufacturing plant in Andhra Pradesh, a state that has been aggressively trying to woo foreign as well as domestic investors. The state government is in talks with more mobile handset and component makers, including Lava and Intex, and is looking at creating an ecosystem, said Karthikeya Misra, industries' director of Andhra Pradesh.

"We have formulated one of the most attractive industrial policies with special incentives pertaining to VAT (value-added tax) exemption to attract electronic hardware and components manufacturers," Misra told ET.

He said the state has also identified government land close to the air cargo facility of Renigunta airport which it may allot to hardware component makers. This will be an attractive proposition for manufacturers, given the areas proximity to Chennai and Krishnapatnam ports.

Misra said the state government was looking at facilitating mobile handset makers to produce largest number of units from Andhra Pradesh, at least 7 million handsets a month from Foxconn's facility at Sri City and the three mobile manufacturers at Tirupati cluster by end of 2016.

Micromax's co-founder Rajesh Agarwal said the proposed unit at Tirupati will be its third manufacturing facility in India after Uttarakhand and the one coming up on the outskirts of Hyderabad. The company is looking to produce handsets, tablets, LED TVs and computer monitors from the Tirupati facility.

Celkon's chairman and managing director Y Guru Swamy Naidu said his company would initially focus on semi-knocked down (SKD) handsets and produce completely knocked down (CKD) gadgets by sourcing components from the local ecosystem.

Addressing journalists after signing agreements with the three mobile manufacturers, N Chandrababu Naidu said the long-term target was to attract at least 30 mobile and electronic gadget manufacturers to southern Andhra region for creating a large electronics hardware ecosystem. The country's import cost of electronic gadgets was surpassing the oil import bill and encouraging local manufacturing will help the country save huge foreign exchange, he said.