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China's reputation as a burgeoning low-cost manufacturing hub continues to capture the attention of the world's electronics manufacturing service providers, but India is taking careful notes in the hope of one day giving its northern neighbor a run for its money. From Bangalore and Chennai to Hyderabad and Mumbia, major foreign EMS providers are building a presence in India as smaller contractors forge relationships with domestic partners through alliances.
"India represents the best alternative to China for low-cost manufacturing of electronic products," said Randall Sherman, an analyst at New Venture Research Corp., Nevada City, Calif. "The next five years will show dramatic growth because the timing is good from a market and cultural point of view. We're becoming a global economy and India is in sync with that."
The predominantly English-speaking nation, which is better known for its success in the information technology (IT) market, has already drawn interest from leading chipmakers such as Intel Corp. and electronic component distributors such as Arrow Electronics Inc. and Avnet Inc. A few EMS providers that rely heavily on China also have expanded their manufacturing and sales presence in India in an effort both to reap the advantages of a low-cost labor pool and stimulate demand in what is expected to become the world's most populous country in the next few decades.
Filling the low-cost gap
"We're looking at creating alliances in many low-cost areas," said Steve Pudles, president of Nu Visions Manufacturing LLC, Springfield, Mass. "We've heard that India is a low-cost location. We want to get the best deals for our customers."
Sources close to Nu Visions said the company is mulling plans to tap Celetron International Ltd., a Bangalore contractor, to fill out its low-cost manufacturing footprint through a strategic partnership. The two companies are financially tethered to Golden Gate Capital, a $700 million private equity firm based in San Francisco. Pudles would not comment on a...