Prime Minister Narendra Modi's call for a digital India seems to not have as much impact as desired, as survey shows China, Vietnam, and South Korea as preferred business hubs for Indian entrepreneurs. While the PM's flagship plan 'Make in India' attracted several international giants, who have shown interest, Indian hardware tech startups continue to face problems in the system.
Co-founder of Soundrex, a wearable tech startup, Shrey Goyal said, "The most important aspect for a startup is, support in building the product. Most of the young entrepreneurs have never developed a commercial product before so it is more crucial for us to get some commercial help." The company found Shenzhen, China, to be a "faster and cheaper" solution for a startup with neither money, nor time to waste. "It is operationally faster in China to develop a product, especially in electronics there are a lot of checks which are inherently available in China."
Another hardware tech startup to chose China, Wafer Electronics, cited their market's agility and ease of manufacturing. Founder Nagarjun Kinare said, "Some parts like induction moulding only take a week to produce in China while Indian manufacturers take a minimum of month. Also, it is easier to source other parts in China because the original equipment manufacturers help in sourcing the parts as the entire ecosystem is very supportive." He added that when they tried coming back to India for their second product, they were stalled by multiple delays. Kinare is currently working on a smart street lighting project with the Goa government. "The project was supposed to be launched last October, but not much has moved from the government's side."
Parallely, startups that did choose India, claim the procedure has not been easy. "China has its own line of issues. The quality checks are not done for the whole lot so while the samples you receive are fine, there are faulty pieces in the lot. In order to avoid this, you need a quality check person sitting in China which only adds to the cost," said Harshit Shrivastava, co-founder of Nimble, a smart ring to control home devices. He added that it becomes difficult to find good manufacturers in the Indian ecosystem. "The main hardware in our product is PCB manufacturing and plastic casing. In the Indian ecosystem, it is difficult to find good manufacturers who can make good moulds. We have not been able to get the quality we wanted and therefore, we had to change our design twice to get the desired quality. This ended up reducing our margins," he said.
Wearable tech startup Lechal found it increasingly difficult to convince Indian manufacturers to produce their products. It eventually decided to set up its own manufacturing unit; a decision that came with challenges. "There are no manufacturers in India for low volumes. This is what drove us to set up our own manufacturing line. We grew the hard way. We are a highly innovative tech product and not all parts were available in the country so we had to depend on foreign partners. However, as volumes started stabilising, we found it more economical to do it in India," Lechal sid.
Meanwhile, not all startups have the luxury of setting up their own manufacturing unit. Kinare said, "Not just manufacturing, units here are not willing to accept a packaging batch of 2500 products. The minimum volume that Indian companies demand is around 10,000 while Chinese companies are willing to pick an order as small as 500 units."
