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Spice Group* will be investing Rs 500 crores to set up a manufacturing unit in Uttar Pradesh. The company also signed a Memorandum of Understanding (MoU) with the Government of Uttar Pradesh for the same, as per which the UP Government will support Spice in establishing the facility by providing the necessary infrastructure, ecosystem and incentives under various schemes.

Spice will use the manufacturing plant to make affordable smartphones and feature phones to target tier II and tier III cities in India. The company said the unit would help it introduce domestically manufactured cheap mobile internet devices and ‘high technology’ mobile products in the country, as a part of the Government of India’s ‘Make in India’ initiative.

Spice had been ramping up the diversity of low-cost products it offers in the country throughout last year. The company had launched its Firefox-OS powered smartphone Fire One Mi-FX 1 priced at Rs 2299 in August and had launched a SIM-enabled smart watch called Spice Smart Pulse M 9010 in July. The month before, the company had tied-up with Google to launch sub-$100 smartphones through the Android One initiative, and in December it launched a Hindi variant of its Android One smartphone. It will be interesting to see what kind of devices Spice will manufacture at the new plant and what the pricing of these devices will be.

Note that earlier this week, smartphone maker Samsung Electronics had also revealed that it had invested Rs 517 crore towards the expansion of its mobile phone plant in Noida, Uttar Pradesh, under the UP Mega Policy. Samsung currently has over 11,000 employees working in U.P. and the company is looking forward to create more job opportunities in the state. The company also mentioned that its Z1 Tizen smartphone will be manufactured at the Noida facility. Currently, most of Samsung India’s phone software is also being developed at the Noida Research Centre.

The company said it had also invested in a modern training facility spread over 35,000 sq. ft. within its manufacturing premises, to focus on capability building and skill enhancement of its employees.

In April last year, mobile phone manufacturer Micromax has also started manufacturing devices in the country, in its Rudrapur plant. Previously, the company imported devices from China where it has tie-ups with manufacturers such as Foxconn.

The Indian government has been encouraging domestic companies to start manufacturing electronics goods within the country instead of importing them and had approved National Policy on Electronics. National Manufacturing Competitiveness Council (NMCC) had also proposed the creation of a $1 billion fund to encourage telecom equipment manufacturing in India. The Cabinet had approved the setting up of two semiconductor wafer fabrication units at a cost of Rs 63,412 crore in India, earlier last year.

*Disclosure: Spice Digital, which is part of the Spice Group, is an advertiser with Medianama