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Cisco to manufacture telecoms gear in India – but not much and not soon

‘To further strengthen and diversify the supply chain’ which is just what India loves to hear

Cisco announced on Wednesday it will start manufacturing some hardware in India.

That said, the American networking giant's commitment is a little vague: its announcement mentions "a significant investment in manufacturing capabilities in India," but doesn't put an actual figure on that spending.

Switchzilla has said the investment will "drive over $1 billion in combined exports and domestic production over the next few years." But with Cisco's annual revenue topping $50 billion, a single billion over a "few years" is a drop in the ocean.

Nor has Cisco said what it will build in India – "best-in-class technology" is the only descriptor. India's IT minister Rajeev Chandrasekhar mentioned "critical telecom products."

Daisy Chittilapilly, Cisco's president for India and adjacent nations, labelled the investment "a significant milestone to power the next phase of growth for Cisco."

But nobody from Cisco nor India's government appears to have mentioned, in announcing this investment, the Production Linked Incentive schemes the nation has dangled to lure manufacturers to its shores. Likewise the Make in India campaign to encourage onshore manufacturing did not get an airing.

The debut of the plan nonetheless saw Cisco CEO Chuck Robbins meet Indian prime minister Narendra Modi, so the two could celebrate the news.

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The PM will have enjoyed Cisco pledging that its investment will support "growing demand from customers in India as well as globally," and "further strengthen and diversify Cisco's supply chain," because having multinationals spending big to serve India's domestic market and use that footprint to export from is a New Delhi policy. India likes to remind the world that relying too much on one nation – cough, China – for manufacturing capabilities is fraught with risk.

Cisco knows this as well as any tech company, having seen huge delays to shipments of products in recent years. Customers have been asked to wait for over a year for some kit to be delivered.

Modi and the government he leads will bask in this news – never mind the vagueness and trivial size of Cisco's commitment, or the fact that the networking giant was already to open to supply chain diversification.

And for the rest of us, we can only hope that Cisco's mention of "reduced lead times" as one benefit of its passage to India becomes reality. ®

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