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Make in India: After Samsung, HTC to manufacture mobile handsets in the country

Economic Times:  June, 2015

Kolkata/New Delhi: HTC has finalised its 'Make in India' plans, becoming the second major global smartphone maker to produce handsets in the country, after South Korean rival Samsung Electronics. 

The Taiwanese premium smartphone maker has entered into an agreement with Global Devices Network, which set up a manufacturing and assembling unit three months ago in Noida, to make the handsets on contract. 

Trials have already begun and commercial production is expected to start from mid-July, initially catering to HTC's requirements in India and eventually Africa and the Middle East, three senior industry executives said. 

An email sent to HTC India did not elicit any response till Monday press time. Global Devices Network managing director Nitesh Gupta confirmed the company is in talks to start commercial assembling of HTC smartphones, which should be finalised by next month. "It's a contract manufacturing agreement," he said, declining to share further details. 

Global Devices Network already produces smartphones for Zen and is in talks with other device sellers. It is owned by the Gupta family of New Delhi and distributes Samsung smartphones, manufactures mobile phone accessories, invests in companies that distribute HTC smartphones and runs a cellphone retail chain. 

HTC smartphones made in India will initially range from its entry-level to mid-segment devices, priced between Rs 10,000 and about Rs 25,000, which are sold under the 'Desire' series. It will set up its quality control unit in the contract manufacturer's plant. The company does not plan to assemble its flagship 'HTC One' series smartphones in India, the industry executives said. 

HTC has of late expanded into contract manufacturing for its entry-to-mid-segment smartphones to slash costs, while it retains production of high-end models. It has tied up with third-party manufacturers in Taiwan and China, according to media reports. The India plan falls in the same line, analysts said.

"Besides the evident duty differentiation of 6% to 6.5% that companies would get after making in India, they will also get access to a big market and labour," said Jayanth Kolla, co-founder of telecom research firm Convergence Catalyst. 

Global smartphone makers including Sony, LG, Xiaomi and Motorola, too, have evinced interest in manufacturing in India due to the growth potential of the country's smartphone market and to avail of tax benefits drawn by Prime Minister Narendra Modi's 'Make in India' policy. Research firm Gartner's principal analyst Anshul Gupta expects Indian smartphone sales to grow 40% in 2015, contributing to over 38% of overall mobile phone sales, up from 27% in 2014.