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‘Need for transparent backward integration policy’

CHENNAI: The continued absence of a policy framework on the component front may hinder the overseas telecom and electronic vendors to follow their principal clients to set up shops in India.

Echoing this concern in an interaction with The Hindu, Sachin Saxena, Operations Director (Operations and Logistics), Nokia, said that a mere focus on attracting end-product makers like Nokia would not necessarily trigger a rush of overseas component suppliers into the country. He termed as ‘narrow thinking’ the belief that backward integration would automatically happen once end-product makers set up shop in India.

Mr. Saxena said end-product makers required vendors to be housed nearby so as to benefit from just-in time delivery and retain competitive edge.

Asserting that a favourable backward integration policy was a must for India to emerge as a cost-effective destination, he said that leading players had been impressing upon officials at varied levels in Government on the need for a transparent backward integration policy. Such a policy could address issues such as tax incentives, infrastructure constraints and licensing regime, he added.

Mr. Saxena said Nokia “is in the process of finalising a contractor” to implement the expansion plan. He expected the construction to commence next month.

Nokia had recently announced a fresh investment of $75 million for the year 2008 at its Sriperumbudur facility near here.

This comes on top of the already invested amount of $210 million.

Mr. Saxena said the capacity expansion work would be completed in six to seven months.

On additional jobs, he said Nokia would focus more on automation while expanding capacity.

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