Indian companies Fear Foreign Competition

Indian companies raised a massive hue and cry against the Indian government’s draft to allow foreign made modules to be used in construction of solar power plants. India has  a target of building 1000 MW by 2013 under JNNSM which impiles almost 9000 crores or $1.8 billion in potential business for solar module makers.But the government’s proposal for allowing import of modules would have destroyed the billion dollar hopes of Indian producers like Moser Baer,XL  as they would have found tough to compete with imports.So we heard some very funny arguments from these companies against imports.

Making Modules Requires Little Value Addition and has Low Entry Barriers

However according to this news item from the Hindu,the government will mandate local content provisions for modules but will allow import of cells.Note local content requirements have been implemented by Ontario this year and by China for wind earlier.For people who don’t understand the solar industry in detail – Solar Modules are made by assembling solar cells which are in turn made from silicon wafers.The Module part of the supply chain is where the least value addition occurs.It is cheap to set up a module making plant and requires little expertise and capex.

Pyrrhic victory for Indian companies

I think if this proposal becomes law , then it will be a pyrhicc victory for Indian companies since it will be more profitable to import cells (forms almost 70% of the total cost of modules) and do the assembly in India.Indian solar companies in my opinion won’t be able to compete in price or quality with imported cells .China has already raised its marketshare to 50% of the world solar market from 5% in 2006.Expect the Chinese,Taiwanese and to some extent US and European cells to dominate the Indian market


I think the Indian government needs to discuss and examine the local content requirements in more detail.While “local content” benefits the growth of industry,promotes research,creates jobs and might lead to creation of “national champions” like Sinovel, the flip side is that it raises the cost of power plants leading to higher burden on consumers.A balance between the two needs to be achieved.China implemented the law for local content of as high as 70% for wind equipment in 2004  and once their companies were big enough they reduced it to 5% in 2010. Something along those lines should be thought by the Indian government also.

Local content to shine in solar photo-voltaic projects – Hindu Business Line

The Ministries of New and Renewable Energy (MNRE) and Power plan to make it mandatory for solar power developers to source crystalline silicon-based modules from domestic manufacturers.However, they can import solar cells for manufacturing these modules for the photovoltaic (PV) projects.This provision will be in the soon-to-be notified guidelines by the Ministries for implementation of the solar power projects under the Jawaharlal Nehru National Solar Mission (JNNSM).

The players argue that there is enough cell capacity in India at present to cater to the requirement under Phase-I of the Mission.Tata BP, Moser Baer, Indo Solar, XL Telecom & Energy and Solar Semiconductor have been traditionally manufacturing and exporting solar cells and modules to Europe, Japan and the US. The players are slated to have a total capacity of 750 MW by the year end.

Pakistan started by banning Facebook as one of the pages had a cartoon drawing competition of one of Islam’s revered figures. A group of lawyers petitioned the court to ban the entire Facebook service and not just the particular page as Facebook was complicit indirectly for allowing the page to be hosted. The court to my surprise obliged to this request.Frankly this seemed a bit absurd Banning the entire infrastructure because an application  was offensive does not seem very rational.I am not sure whether the authorities asked Facebook to remove the particular page.Then the government banned YouTube followed by Twitter .The Witch Hunt  seems to be going to ridiculous lengths with the ban on Blackberry.The way they are going they might ban communications in the entire country. A lot of closed societies in the Middle East ,China and other places place restrictions on the Internet but never go as far as to ban an entire Service. Would be interesting to see how this Witch Hunt ends. I think Pakistan needs these companies more than these companies need Pakistan as a market.

Pakistani telecom authority bans Blackberry services – Economic Times

The Pakistan Telecommunication Authority (PTA) has not only blocked the usage of social networking sites like Twitter and Facebook, but also of Blackberry services.

According to the Daily Times, the PTA has asked all cellular companies to put an immediate cap on all Blackberry services until further notice.Sources said the PTA issued the directives on the orders of the Lahore High Court, which asked the government to make sure that Facebook is blocked for all Internet users in the country. On Friday, following a ban on Facebook and popular video sharing portal YouTube, the social networking site Twitter was banned in Pakistan for carrying blasphemous content.

Hundreds of Twitter users tried in vain to log in to their accounts as a message, “This site has been restricted,” was displayed on their computer screens.

India has  put a ban on Chinese telecom equipment manufacturers Huawei and ZTE due to security concerns.There have been reports of Internet espionage of sensitive government of India’s computers as well as some of the company’s headquarters being off limits to Indian employees.This had made the government wary putting a ban on the Chinese companies involved in communications.In a desperate attempt to placate India’s concerns Huawie’s Chinese employees are keeping Indian names.This is totally hilarious  and I don’t think will cut much ice with the authorities.Small scale Chinese handset makers which also are facing a ban in India are trying to open factories in India to circumvent these restrictions.

Huawei India execs take Indian names to be more culturally acceptable – Economic Times

Chetan Chen is into technology, Deepak Xu handles marketing, and Deepika Fang is a network systems pro. And when their company needs to reach out to the public, Rajeev Yao gets into the picture.

Welcome to the charm offensive of Huawei India, a firm that is on the radars of the Indian security establishment by virtue of its place of incorporation, the People’s Republic of China. As its top brass prepares to walk extraordinary miles to get its operations going on in one of the world’s biggest telecom markets, the Chinese equipment maker is nudging its Mandarin staff to mind their names.

Ergo, this cultural revolution with a telecom twist has Chen Tian Siang, a top consultant with Huawei India, introducing himself as Chetan Chen; Ling Yong Xu, a top management executive in its customer care division, is Deepak to his Indian colleagues; Liu Fang, a senior executive with its networks division, goes by the name ‘Deepika Fang’; Li Gin, a coordinator with Huawei India, is called ‘Rosy’; and Zhao Bing, in charge of the company’s warehouse division, is just Amit. To top it all, Huawei’s spokesperson in India, Weimin Yao, is known as ‘Rajeev’ to media colleagues here.

Huawei executives carry their Indian names even on their visiting cards. Suraj, Amit, Arvind, Ravi, Rajesh and Rajeev were some of the popular names adopted by their Chinese executives in India, says a Huawei staff.

The company reasons that since Indians find it difficult to pronounce Chinese names, the Indian nomenclature helps in daily operations. This also makes Chinese executives more culturally acceptable not just to their Indian colleagues, but also to their clients and business associates in the country.

Chinese Companies Try to Solve their India Problem – Businessweek

The government late last year took steps to stop a flood of Made-in-China phones entering the country. The phones are made by the so-called shanzhai, or bandit, manufacturers. These companies specialize in producing inexpensive, no-name phones; Indian partners often import them and slap on a local brand name. Over the past few years, Indian sales of these gray-market Chinese-made phones have soared; they accounted for 30% of the Indian market in 2009, says Flora Wu, an analyst in Beijing with consulting firm BDA China. That’s 40 million handsets, up from almost zero in 2007. Problem is, many of these shanzhai companies don’t put International Mobile Equipment Identity numbers on their phones. Given the way the terrorists who attacked Mumbai in 2008 used cell phones to communicate, having tens of millions of anonymous cell phones in the country creates a major security threat. So last year the Indian government began forcing operators to disconnect phones without IMEIs. That change – as well as the latest moves against Huawei and ZTE – may be leading some Chinese companies to rethink India. Instead of exporting from China, why not produce locally? Like the Japanese automakers that started manufacturing in the U.S. in the 1990s, thereby disarming some of their strongest nationalist critics, the Chinese might be able to win friends in India by investing in the country, creating local jobs and helping to build a local supply chain of manufacturers. One sign of possible things to come: According to the Indian newspaper the Business Standard, China Wireless Technology, a handset maker in Shenzhen, wants to open a factory in India and boost the number of Indian employees from current 200-300 to 1,000.

China has recently been in the news over Internet Espionage on defense and sensitive installations in India and USA. This has led to the high profile exit of Google from China.Recently a Canadian research organization revealed/alleged  how Chinese govt backed hackers had broken into Indian embassy and government computers.This has made the Indian government wary of allowing Chinese equipment suppliers into India’s communication sector.Though both ZTE and Huawei’s equipment is much cheaper compared to Nokia  Siemens,Alcatel and Ericsson , these companies face an uphill battler in India right now. With around 400 million users and 600 million to go , India is THE Telecom Market to be in from a demand point of view.Shows you how Chinese companies are disadvantaged due to their home country in different parts of the world .The Rio Tinto and Google cases reflect the increasing antagonism between China and Rest of the World.

A Setback for China’s Tech Ambitions in India – Bloomberg

Facing increased competition at home and government pressure to expand overseas, Chinese telecom equipment makers have been looking toward India. The country is already the biggest export market for China’s two leading phone gear manufacturers, Huawei Technologies and ZTE, and both companies have made India a top priority. “If [Indian] government policies are favorable,” ZTE India managing director D.K. Ghosh said on Apr. 14, “we will further scale up our investments.”

When it comes to China’s Big Two, though, India’s policies are hardly favorable. The government has sent letters to Indian phone companies saying they can’t buy equipment from Huawei, ZTE, and several other mainland companies due to security risks. In April, researchers reported that Chinese hackers had targeted Indian defense computers. And in December, India banned many Chinese cell phones, also because of security concerns, and imposed anti-dumping duties on transmission gear from Huawei and other vendors. Huawei says it’s committed to “the development of the Indian telecoms industry.” ZTE says it adheres to Indian law.

The new restrictions don’t apply only to the Chinese. An Israeli company and California-based U.T. Starcom (which does most of its manufacturing in China) were hit, too. Yet few analysts doubt that China is the main target of the restrictions. “The Indians are incredibly paranoid about China,” says David Zweig, a professor of politics at Hong Kong University of Science & Technology.

The tensions could be a problem for other Chinese tech companies. As India has grown to the world’s No. 2 cellular market in recent years, its imports of Chinese handsets have soared. Tencent, China’s top instant-messaging service, has invested in Indian Internet startups. And India is the third-largest operation (after China and the U.S.) for, an online marketplace based in Hangzhou. An Alibaba spokeswoman says the company isn’t worried about the restrictions. Tencent declined to comment.

While India’s phone companies could buy equipment from Western suppliers, they would pay far more. So carriers are lobbying the government for a change—and hedging their bets, says Sanjeev Aga, managing director at Mumbai-based Idea Cellular. “A lot of companies are finding suppliers in India,” Aga says. Any resolution, though, may ultimately require talks between the two governments, says Kunal Bajaj, a partner with market research firm Analysys Mason. “There is going to be quite a bit of posturing between the two countries for some time,” he says