Nokia Considering Shifting Most Of Its Design Work To India

SUMMARY

Nokia is keen on localising more of its operations, recognising the need to move up the value chain in India

The telecom giant is likely to begin designing telecom network infrastructure equipment from its facility in Chennai

The development comes at a time when India is emerging as a global manufacturing hub, with a number of global companies setting up base in the country

Finnish telecom giant Nokia is reportedly considering shifting a large part of its global design capacity to India.

The move can be attributed to the presence of large designing talent in India, Economic Times reported, citing sources.

Nokia has a presence in five locations across India – Gurugram, Noida, Mumbai, Chennai, and Bengaluru – with two R&D centres in Chennai and Bangalore.

The company is reportedly keen on localising more of its operations, recognising the need to move up the value chain in India. “Nokia could look to begin designing telecom network infrastructure equipment from its facility in Chennai,” one of the sources was quoted as saying.

Currently, the majority of Nokia’s design work is carried out in Finland, the UK, and parts of the US.

Nokia is prioritising design expansion in India while also considering increasing manufacturing. The company is building its local supply chain through its ongoing localisation efforts.

Nokia already manufactures 5G/4G radios and GPON optical line terminals for both domestic and global markets in India, in partnership with Foxconn.

The company has manufactured over 7 Mn telecom network equipment units in India to date, with about 40% of these being exported.

India is a lucrative market for companies in the telecom space because of the country’s large telecom subscriber base. The country’s telecom subscriber base crossed the 1.2 Bn mark in April this year, as per the Telecom Regulatory Authority of India (TRAI).

The latest development comes at a time when India is emerging as a global manufacturing hub.

iPhone maker Apple has been gradually scaling up its manufacturing operations in the country, with India now accounting for about 7% of total iPhones produced globally. Apple manufactured iPhones worth INR 1 Lakh Cr in India last year and recorded a revenue of INR 49.3K Cr in FY23.

Besides, Google has also announced its decision to manufacture Pixel 8 in the country. Even Chinese manufacturers are setting up manufacturing plants in India. BBK Group, which owns Oppo, Vivo, and Realme, has partnered with Dixon Technologies and Karbonn Group for smartphone production.

The electronics manufacturing sector in India is projected to reach $300 Bn by 2026. The smartphone industry alone is expected to create 1 Mn direct jobs by 2025.

India’s smartphone market, the world’s second-largest, shipped 146 Mn units in 2023. Despite a 2% year-on-year decline, the market is expected to recover in 2024 with an estimated 5-8% growth.