India’s electronics industry is on the cusp of unprecedented growth: Nikhil Rao

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India’s electronics industry is on the cusp of unprecedented growth: Nikhil Rao

India’s electronics industry is on the cusp of unprecedented growth: Nikhil Rao

Interviews
Jan 29,25

In this interview with Rakesh Rao, Nikhil Rao, VP of Operations at Flex India, elaborates on India’s fast-evolving electronics manufacturing sector and Flex’s growth plans in the country.

India’s electronics industry is on the cusp of unprecedented growth: Nikhil Rao

As one of the early entrants in India, the global electronics major Flex Ltd has been contributing majorly to the growth of the country’s electronics manufacturing services (EMS) sector. Nikhil Rao, who serves as the Vice President of Operations at Flex India, has been playing a pivotal role in driving the company’s strategic initiatives in India. In conversation with Rakesh Rao, he elaborates on India’s fast-evolving electronics manufacturing sector and Flex’s growth plans in the country.

Can you provide an overview of Flex India’s operations?

Flex established its operations in India in 2001, beginning with a facility in Bangalore that initially focused on pager manufacturing. Over the years, we evolved, transitioning into electronics manufacturing services (EMS). In 2006, we launched the Chennai Industrial Park, a sprawling 150-acre campus with over 1 million square feet of built-up space. This facility includes a Special Economic Zone (SEZ) and a Domestic Tariff Area (DTA), enabling us to cater to both export and domestic markets. Flex India’s operations are multifaceted. We handle manufacturing, post-sale services like repairs, field services, warehousing, and distribution. Additionally, we operate three global capability centres (GCCs) in Chennai, Coimbatore, and Pune. These centres provide critical support services, such as engineering, HR, procurement, and IT, for Flex’s global operations.

How has Flex supported the growth of the Indian electronics industry in recent years?

Flex has played a pivotal role in India’s electronics manufacturing growth, being one of the first EMS companies to establish a significant presence in the country. With over two decades of experience, we have contributed to the industry’s evolution from mobile phone manufacturing to a diversified range of high-technology products. In recent years, government initiatives like the Production-Linked Incentive (PLI) schemes have further accelerated growth, enabling India to attract global players. For example, while our initial focus was on mobile phone manufacturing, we have expanded into sectors such as telecommunications, automotive, and industrial products. Our contributions are not limited to manufacturing; we also focus on workforce development and supplier ecosystem enhancement. By working closely with local suppliers, we help them adopt advanced technologies and meet global quality standards, ensuring the industry’s overall growth and self-reliance.

How has the PLI scheme aided the growth of India’s electronics manufacturing sector?

The PLI scheme has been a game changer for India’s electronics manufacturing industry. These government incentives have made India a globally attractive destination for manufacturing, especially for OEMs looking to diversify their supply chains. The scheme addresses cost challenges, providing financial incentives that reduce production costs and improve competitiveness. For example, PLI schemes initially focused on mobile phone manufacturing, they have since broadened to include IT hardware, telecommunications, and component manufacturing.

Beyond mobile phones, how has India’s electronics manufacturing industry diversified?

Mobile phone manufacturing has been a cornerstone of India’s electronics industry, showcasing the country’s potential as a manufacturing hub to the world. This has inspired diversification into other segments, such as IT hardware, telecommunications, automotive products, and industrial electronics. While Flex initially focused on mobile phone production, we now manufacture a range of high-technology products, including advanced telecommunications equipment and automotive components. These products require sophisticated processes and a highly skilled workforce, which we are committed to developing. The government has been instrumental in backing this diversification through targeted policies and incentives. By collaborating with industry stakeholders, the government ensures that India remains competitive across multiple sectors.

India still relies heavily on imported electronics components. How can we develop a strong domestic supply chain?

Building a robust domestic supply chain is crucial for India’s electronics manufacturing industry. Dependence on imports not only increases costs but also introduces logistical complexities and vulnerabilities. To address this, we must focus on developing a local supplier ecosystem that can meet the industry’s demands. At Flex, we have taken proactive steps to support local suppliers. Our dedicated supplier development team works closely with partners, helping them understand technology requirements, adopt best practices, and invest in advanced capabilities. For instance, we identify components that are currently imported and collaborate with suppliers to localise their production.

What role can government schemes play in strengthening the electronic components supply chain?

Government initiatives, such as the upcoming PLI schemes for components, are critical for building a strong local supply chain. These programs provide financial incentives to suppliers, encouraging them to invest in localisation and advanced manufacturing capabilities. The government has learned valuable lessons from the success of the mobile phone PLI scheme and is applying these insights to other segments. By engaging closely with industry stakeholders, the government ensures that its policies address real-world challenges and opportunities.

How are emerging technologies like AI, ML, and 3D printing transforming the electronics manufacturing sector?

Emerging technologies such as artificial intelligence (AI), machine learning (ML), and 3D printing are revolutionising the electronics manufacturing industry. These technologies enhance process quality, increase efficiency, and optimise resource utilisation. At Flex, we are leveraging these advancements to stay ahead of the curve. For example, AI and ML are used to improve predictive maintenance, ensuring that machinery operates at peak efficiency. 3D printing enables rapid prototyping, reducing the time and cost involved in product development. These technologies also support sustainable manufacturing, an area where Flex is deeply committed. By minimising waste and improving energy efficiency, we ensure that our operations are both environmentally and economically sustainable.

Are companies shifting from linear supply chains to circular manufacturing models?

Yes, the shift from linear to circular manufacturing is gaining momentum, driven by the need for sustainability. In a linear model, products are manufactured, used, and discarded. Circular manufacturing, on the other hand, focuses on reuse, repair, and recycling. Flex is at the forefront of this transition. For example, we offer aftermarket services such as repair and refurbishment, extending product life cycles. End-of-life products are recycled, and materials like metals and plastics are reintegrated into the manufacturing process. Our facility in Brazil has successfully implemented a circular model, and we are working to replicate this in India. By adopting circular manufacturing, we not only reduce environmental impact but also align with our customers’ sustainability goals.

What is the future of India’s electronics manufacturing industry, including components and semiconductors?

India’s electronics manufacturing industry is on the cusp of unprecedented growth. The success of mobile phone manufacturing has demonstrated the country’s potential, and this success is now being replicated across other sectors. Key growth areas include IT hardware, automotive electronics, and semiconductors. The government’s incentives, coupled with bilateral trade agreements, provide a favourable environment for both domestic and export-focused manufacturing. Flex is heavily invested in this future. We are focusing on skill development, training engineers, and upskilling the workforce to meet the demands of high-technology manufacturing. Additionally, advancements in semiconductor manufacturing will further strengthen India’s position as a global leader in electronics.

Could you outline Flex India’s growth plans and areas of focus?

Flex has been in India for over two decades, and our commitment to the country remains stronger than ever. We see significant growth opportunities in sectors like communications, telecommunications, automotive, and healthcare. Our focus is on high-technology products that require advanced manufacturing processes and a skilled workforce. We are investing in sustainable manufacturing practices, ensuring that our operations are environmentally responsible and aligned with our 2030 ESG goals.