Cisco commits $60 million towards expansion

Equipment Cisco plans to Make in India could be used for broadband connectivity or defence contracts, Chambers said adding that field is open for more

Global networking technology major Cisco said on Thursday it is exploring the possibility of manufacturing in the country in line with Prime Minister Narendra Modi’s Make in India push. The company has committed an additional investment of $60 million towards expansion of its current facility and skill development in the country. Though the company has not specified any funds for manufacturing, John Chambers, chairman and current chief executive of Cisco, said it is in the process of figuring out the logistics, procurement cycle and tax issues and looking to start its manufacturing within two quarters.

The company will invest $20 million in the Cisco Networking Academy for the next five years to train 1,20,000 students for jobs in the digital economy adding to around a 1,00,000 students who have already been trained so far. The rest $40 million will go into expansion of its research and development facility in Bangalore, which already has around 10,000 employees.

This investment will be over and above the $1.7 billion which the company spends annually on its India operations, which contributes around $1.1 billion, or two per cent, to the global revenues of the company.

Chambers, who also met Modi and union minister for communications and information technology, Ravi Shankar Prasad on Thursday said, “We have an opportunity to work with India.” He added that the company is keen to partner with the government in several of its flagship projects such as Make in India, Digital India, Skill India and Smart Cities, among others.

The equipment that the company plans to manufacture could be used for broadband connectivity or defence contracts, said Chambers adding that the field is open for more.

Cisco will organise the Cisco Design and Innovation Conference in Bengaluru in February 2016 to bring together over 75 of Cisco's key suppliers and partners to drive collaboration on product development and Internet of Everything-enabled supply-chain technology.

This comes a day after Cisco announced an investment of $10 billion towards its expansion in China. Fielding questions on why India investment is much lower, Chambers said that this is the company’s first step towards manufacturing in India much like it took similar small steps in China 20 years ago its operations there became huge. Chuck Robbins, incoming CEO of Cisco, added that the company would want its peers and competitors to also start manufacturing in the country.  Meanwhile, talking about his meeting with Modi, Chambers said, "India is our second headquarter and the Prime Minister today said that make it your home.”  

“If manufacturing is important for you, for your government, it is important for us too," Robbins added.  The company which derives two per cent of its global revenues from India said increasing that number to five per cent over the next five years seems like a reality now, given the government’s focus on technology.