India not yet ready to become a production hub for high-tech devices: Panasonic

Panasonic currently procures its Toughpads from Japan and Toughbooks from Taiwan for Indian market

This report has been revised to incorporate a clarification from Panasonic

Prime Minister Narendra Modi’s flagship campaign, Make in India, might have started gaining momentum, thanks to investments from China, South Korea and the US. But Japanese electronic equipment major, Panasonic, says India is not yet ready for setting up manufacturing and technology units for high-end mobile devices . India lacks adequate skilled personnel to produce such high-tech devices, the company feels.

“India needs more skilled people. It’s more convenient for us to manufacture such products in Japan since we have more than 80 years of experience (in manufacturing sophisticated instruments),” said Hide Harada, managing officer of the IT products business division, Panasonic Corp. As half of its population is below 25 years, the country had identified skill development as a key area of focus. However, according to the Economic Survey report 2014-15, India’s efforts so far have failed to match the requirement.

However, according to Panasonic, the company is committed to India and aims to gradually shift its manufacturing facilities to help make India a global manufacturing hub. To expand its manufacturing base in the country, for its appliances and other products, Panasonic India set up its largest plant in Jhajjar, Haryana, in December 2012. Currently, it procures various industrial and consumer products from its plants in Tamil Nadu, Gujarat, Madhya Pradesh and Haryana.

Panasonic said it aimed to sell 100,000 units cumulatively of its rugged devices — Toughbook and Toughpad — in India by 2018.

The company sold about 7,000 units of such devices to enterprise customers across verticals like government, defence and logistics among others.

The report also underlines the need for faster intervention by the authorities to address the issue.

According to Harada, the demand for skilled people will rise, as the demand for such products grows over the years. “The need for know-how will grow, as higher demand for such products will lead to the realisation among corporations and the government that importing is no more a viable option," he says.

Panasonic, which is a global market leader in rugged and semi-rugged mobile devices with a 46 per cent share in 2014, is increasing its portfolio in India too. It launched two Toughpads and a Toughbook on Wednesday targeted towards institutional buyers in the defense, security, manufacturing and logistics sectors.

Gunjan Sachdev, general manager and national business head of Panasonic India’s systems solution division, feels the consumer mindset in the country is changing and corporations and the government are gradually acknowledging the need for developing high-end technology devices. The rugged and semi-rugged devices market in India is very small. Last year, only about 12,000 devices worth Rs 120 crore were sold in the country.

Panasonic India currently imports Toughpads from Japan and Toughbooks from Taiwan. “India is just one per cent of our 740,000 units of global sales last year. However, with the slow transition that we observe among the government and private authorities alike, we aim to sell 100,000 units by 2018,” Harada said.