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Unfortunately I don't think it's that straightforward, specifically for moving development to India. One of the major issues for manufacturing in India is the a

Unfortunately I don't think it's that straightforward, specifically for moving development to India. One of the major issues for manufacturing in India is the availability of reliable electricity. Even though India now has a net surplus of electric generation, there are systemic problems with the electric grid. Some of them are due to poor infrastructure, others due to theft or corruption. But the takeaway is that a factory in India just can't run for 24 hours a day the way it can in China. This is not likely to change in the foreseeable future, even with sustained international investment. There are a ton of constituencies in India that make fixing these kinds of issues much more complicated than in China. So while a company like Foxconn may be able to setup a factory and use their considerable resources to make it work, I don't think we're likely to see the kind of ecosystem pop up that you see in Shenzhen.

potatofarmer45 8y ago
I recall talking to an old hand at Li & Fung (they're the largest contract manufacturing company in the world) and he talks of the old days where Shenzhen was literally a village with no factories, no paved roads, and no electricity. When they wanted to manufacture textiles back then, they literally had to build a factory from the ground up. It's true India has a lot of issues. But the good thing about investments like these is that it creates an opportunity for everyone involved to potentially make a change for the better. This could be the start of a new series of investment in manufacturing and the potential could batter enough heads together to fix issues like electricity reliability especially if every has a vested interest in making it work out. I'm not saying it will definitely happen, but these are the sort of gamechangers that could disrupt the status quo for the better.
- ksec 8y ago
  >Li & Fung (they're the largest contract manufacturing company in the world) May be they were, but I doubt they are the largest anymore. LF is has been selling asset after asset and their share price are now in 20 Yr's low. Basically they are a dying company.
- entity345 8y ago
  > Shenzhen was literally a village with no factories, Indeed. The thing is that China has been investing like crazy in infrastructure projects which proved crucial to develop industry and its physical supply chain. > no paved roads, and no electricity And they built all that first. I was in Shenzhen 10 years ago with an Indian colleague, its first trip to China. He was shocked when he saw that Shenzhen was a modern metropolis with large avenues as he was expecting something like in India...
- btian 8y ago
  When was that? They may be exaggerating. I was in Shenzhen in the early 90s, and there was already reliable electricity, roads, ports etc., and those were not built by Li & Fung
  - blacksmith_tb 8y ago
    Here's a set of photos from 1980[1], Shenzhen looks pretty provincial at that point. 1: https://www.flickr.com/photos/lwdemery/sets/72157611154071370/ https://www.flickr.com/photos/lwdemery/sets/7215761115407137...
- rohansingh 8y ago
  > It's true India has a lot of issues. But the good thing about investments like these is that it creates an opportunity for everyone involved to potentially make a change for the better. This could be the start of a new series of investment in manufacturing and the potential could batter enough heads together to fix issues like electricity reliability especially if every has a vested interest in making it work out. In theory this is all true, but you really have to look at the facts on the ground and the specific situation. Tons of folks have agreed with what you're saying, and poured in investment, and the situation remains really challenging. It's not for a lack of effort — India has a huge potential labor force, it's well-situated for shipping to emerging markets (like China, parts of Africa, or India itself). And, as was pointed out above, it has a strong democratic tradition that makes it appealing to Western investment. But that same democratic tradition makes it a very different situation from China. It can take literal decades to organize and satisfy all the constituencies involved for projects like a power station, factory complex, or highway construction. Labor constituencies are strong and organized enough to seriously push back against projects, and are often skeptical of foreign investment and "interference". Political parties even resort to violence to stop initiatives that they disagree with. I'm not saying that it's going to be like this forever. As a US national of Indian origin, I would be happy if the the situation was different so that I could work with manufacturing partners in India. Having some cultural and legal ties to the country would give me an advantage that I don't have when working with partners in Shenzhen or Shanghai. But it's really just not the case right now. By all means, I'm happy that this investment is happening, but I think we need to be realistic. For a manufacturing ecosystem to develop that looks anything like China does, it's going to be more on the scale of 50 years or more, not 5-10.
NicoJuicy 8y ago
Made in India 2025 is a long term commitment that will become very profitable. Since India is also a closed market, but more aligned with Western values
mywittyname 8y ago
I imagine any factory builder would take this into account and construct enough onsite power generation to maintain full operation during outages.
- sandworm101 8y ago
  A car assembly plant can pull up to 100 MVA, that is 100,000 kva or roughly 1,000,000 amps at household current. That isn't going to come from a few honda backup generators. Such power would require either a few hundred acres of solar panels attached to battery the side of a small nation, or an on-site combustion plant.
gpm 8y ago
I don't pretend to have a great understanding of what goes into building manufacturing facilities on the scale of Apple/Foxconn, but is the state of the electrical grid actually that relevant? It seems like that they would be a big enough consumer of electricity that any standard grid would struggle to accommodate them, and they would be doing things like: - Placing themselves immediately beside the power plant. - Place their own wires between themselves and the power plant. - Maybe even build their own power plants (particularly with things like solar/wind that scale down nicely).
- ticmasta 8y ago
  >> Maybe even build their own power plants (particularly with things like solar/wind that scale down nicely). Renewables in this scenario is a fairy tale. [No Renewable Subsidy] + [Shift Downside onto Public] + [Energy Demand Timing] = COAL!
reaperducer 8y ago
One of the major issues for manufacturing in India is the availability of reliable electricity. I've heard this a number of times over the last decade or so, and wonder what is it that prevents factories from running their own generators/power stations. Is fuel availability also a problem? Is is not economically feasible? There are plenty of factories in the world that have backup power sources. What's happening in India that makes this not common?
- bluGill 8y ago
  Power from generators cost substantially more than power from a large baseload power plant. Factories install backup generators, but they are not the primary source of power because it is not economical to use them that way.
  - culturestate 8y ago
    I'm not anywhere near an expert in this field, but I feel like I've been hearing a lot of noise about on-site power generation recently. Apple even (reportedly [1]) has their own on-site plant for Apple Park and only uses utility power as a backup; is there such a substantial difference between the power needs of a major corporate campus (with significant technical R&D onsite) and a manufacturing facility? 1. https://appleinsider.com/articles/12/03/10/apple_provides_additional_details_renders_for_cupertino_campus_project https://appleinsider.com/articles/12/03/10/apple_provides_ad...
    - bluGill 8y ago
      Depends. Generally with power there are elements of scale in favor of very large generation plants. Manufacturing does sometimes have their own power plants (aluminium needs a lot of power to refine) when you can cross that line. Also if the local utility is running into issues building large plants a medium sized plant might get under the regulations and so be cheaper. Of course when you run your own plant you also control the reliability - in some cases this can be worth a lot of extra cost. Utilities often give companies a large discount for having a backup generator that the utility can ask them to switch to at times of high demand: depending on how efficient Apple's generators are it could well be that it is cheaper to run them most days - utilities are going to be running peaking plants then anyway which are no more efficient and Apple saves the line loss price. Generators are complex and weird. Many use more fuel at 50% of their capacity than at 80%, even though the latter is delivering substantially more power.
pighive 8y ago
I can agree with most of your comment, but India has changed (may not be true in all regions). It’s changing every day, there are some parts drafted as Industrial Zones with reduced/subsidized resources like land, electricity, tax incentives and water supply just for this. One such place I can think of is Sri City [0] close to Chennai. I am not sure about the current situation, but it is a good place if you are thinking about manufacturing or assembling electronics. This doesn’t mean India is going to challenge, but the conditions are much different. [0]. https://en.m.wikipedia.org/wiki/Sricity https://en.m.wikipedia.org/wiki/Sricity
wenc 8y ago
I can't find the latest data (Google only shows 2017 numbers), but how much of India has 24/7 power today? (I know for a while only the state of Gujarat had it; back in the day, even Bangalore didn't have 24/7 power so most multinationals that set up shop there ran their own generators)
esmi 8y ago
That just means I need my own generation and I put it with everything else in the cost roll up. If the economics is still there, I go.
ratnakar007 8y ago
This is old news. Last 10 years there has been much focus on Electricity generation and distribution. Most provinces/states have surplus power.

potatofarmer45 8y ago

I recall talking to an old hand at Li & Fung (they're the largest contract manufacturing company in the world) and he talks of the old days where Shenzhen was literally a village with no factories, no paved roads, and no electricity. When they wanted to manufacture textiles back then, they literally had to build a factory from the ground up. It's true India has a lot of issues. But the good thing about investments like these is that it creates an opportunity for everyone involved to potentially make a change for the better. This could be the start of a new series of investment in manufacturing and the potential could batter enough heads together to fix issues like electricity reliability especially if every has a vested interest in making it work out. I'm not saying it will definitely happen, but these are the sort of gamechangers that could disrupt the status quo for the better.

ksec 8y ago
>Li & Fung (they're the largest contract manufacturing company in the world) May be they were, but I doubt they are the largest anymore. LF is has been selling asset after asset and their share price are now in 20 Yr's low. Basically they are a dying company.
entity345 8y ago
> Shenzhen was literally a village with no factories, Indeed. The thing is that China has been investing like crazy in infrastructure projects which proved crucial to develop industry and its physical supply chain. > no paved roads, and no electricity And they built all that first. I was in Shenzhen 10 years ago with an Indian colleague, its first trip to China. He was shocked when he saw that Shenzhen was a modern metropolis with large avenues as he was expecting something like in India...
btian 8y ago
When was that? They may be exaggerating. I was in Shenzhen in the early 90s, and there was already reliable electricity, roads, ports etc., and those were not built by Li & Fung
- blacksmith_tb 8y ago
  Here's a set of photos from 1980[1], Shenzhen looks pretty provincial at that point. 1: https://www.flickr.com/photos/lwdemery/sets/72157611154071370/ https://www.flickr.com/photos/lwdemery/sets/7215761115407137...
rohansingh 8y ago
> It's true India has a lot of issues. But the good thing about investments like these is that it creates an opportunity for everyone involved to potentially make a change for the better. This could be the start of a new series of investment in manufacturing and the potential could batter enough heads together to fix issues like electricity reliability especially if every has a vested interest in making it work out. In theory this is all true, but you really have to look at the facts on the ground and the specific situation. Tons of folks have agreed with what you're saying, and poured in investment, and the situation remains really challenging. It's not for a lack of effort — India has a huge potential labor force, it's well-situated for shipping to emerging markets (like China, parts of Africa, or India itself). And, as was pointed out above, it has a strong democratic tradition that makes it appealing to Western investment. But that same democratic tradition makes it a very different situation from China. It can take literal decades to organize and satisfy all the constituencies involved for projects like a power station, factory complex, or highway construction. Labor constituencies are strong and organized enough to seriously push back against projects, and are often skeptical of foreign investment and "interference". Political parties even resort to violence to stop initiatives that they disagree with. I'm not saying that it's going to be like this forever. As a US national of Indian origin, I would be happy if the the situation was different so that I could work with manufacturing partners in India. Having some cultural and legal ties to the country would give me an advantage that I don't have when working with partners in Shenzhen or Shanghai. But it's really just not the case right now. By all means, I'm happy that this investment is happening, but I think we need to be realistic. For a manufacturing ecosystem to develop that looks anything like China does, it's going to be more on the scale of 50 years or more, not 5-10.

NicoJuicy 8y ago

Made in India 2025 is a long term commitment that will become very profitable. Since India is also a closed market, but more aligned with Western values

mywittyname 8y ago

I imagine any factory builder would take this into account and construct enough onsite power generation to maintain full operation during outages.

sandworm101 8y ago
A car assembly plant can pull up to 100 MVA, that is 100,000 kva or roughly 1,000,000 amps at household current. That isn't going to come from a few honda backup generators. Such power would require either a few hundred acres of solar panels attached to battery the side of a small nation, or an on-site combustion plant.

gpm 8y ago

I don't pretend to have a great understanding of what goes into building manufacturing facilities on the scale of Apple/Foxconn, but is the state of the electrical grid actually that relevant? It seems like that they would be a big enough consumer of electricity that any standard grid would struggle to accommodate them, and they would be doing things like: - Placing themselves immediately beside the power plant. - Place their own wires between themselves and the power plant. - Maybe even build their own power plants (particularly with things like solar/wind that scale down nicely).

ticmasta 8y ago
>> Maybe even build their own power plants (particularly with things like solar/wind that scale down nicely). Renewables in this scenario is a fairy tale. [No Renewable Subsidy] + [Shift Downside onto Public] + [Energy Demand Timing] = COAL!

reaperducer 8y ago

One of the major issues for manufacturing in India is the availability of reliable electricity. I've heard this a number of times over the last decade or so, and wonder what is it that prevents factories from running their own generators/power stations. Is fuel availability also a problem? Is is not economically feasible? There are plenty of factories in the world that have backup power sources. What's happening in India that makes this not common?

bluGill 8y ago
Power from generators cost substantially more than power from a large baseload power plant. Factories install backup generators, but they are not the primary source of power because it is not economical to use them that way.
- culturestate 8y ago
  I'm not anywhere near an expert in this field, but I feel like I've been hearing a lot of noise about on-site power generation recently. Apple even (reportedly [1]) has their own on-site plant for Apple Park and only uses utility power as a backup; is there such a substantial difference between the power needs of a major corporate campus (with significant technical R&D onsite) and a manufacturing facility? 1. https://appleinsider.com/articles/12/03/10/apple_provides_additional_details_renders_for_cupertino_campus_project https://appleinsider.com/articles/12/03/10/apple_provides_ad...
  - bluGill 8y ago
    Depends. Generally with power there are elements of scale in favor of very large generation plants. Manufacturing does sometimes have their own power plants (aluminium needs a lot of power to refine) when you can cross that line. Also if the local utility is running into issues building large plants a medium sized plant might get under the regulations and so be cheaper. Of course when you run your own plant you also control the reliability - in some cases this can be worth a lot of extra cost. Utilities often give companies a large discount for having a backup generator that the utility can ask them to switch to at times of high demand: depending on how efficient Apple's generators are it could well be that it is cheaper to run them most days - utilities are going to be running peaking plants then anyway which are no more efficient and Apple saves the line loss price. Generators are complex and weird. Many use more fuel at 50% of their capacity than at 80%, even though the latter is delivering substantially more power.

pighive 8y ago

I can agree with most of your comment, but India has changed (may not be true in all regions). It’s changing every day, there are some parts drafted as Industrial Zones with reduced/subsidized resources like land, electricity, tax incentives and water supply just for this. One such place I can think of is Sri City [0] close to Chennai. I am not sure about the current situation, but it is a good place if you are thinking about manufacturing or assembling electronics. This doesn’t mean India is going to challenge, but the conditions are much different. [0]. https://en.m.wikipedia.org/wiki/Sricity https://en.m.wikipedia.org/wiki/Sricity

wenc 8y ago

I can't find the latest data (Google only shows 2017 numbers), but how much of India has 24/7 power today? (I know for a while only the state of Gujarat had it; back in the day, even Bangalore didn't have 24/7 power so most multinationals that set up shop there ran their own generators)

esmi 8y ago

That just means I need my own generation and I put it with everything else in the cost roll up. If the economics is still there, I go.

ratnakar007 8y ago

This is old news. Last 10 years there has been much focus on Electricity generation and distribution. Most provinces/states have surplus power.