U.S. telecom, IT companies eager to set up operations in India: Maran

Investment plans in the range of $1.2 billion; Chennai, Bangalore, Noida are preferred destinations
CHENNAI: Global leaders in telecom and IT hardware equipment manufacturing based in the United States, including the world's largest chip maker Intel Corporation, are bullish on setting up operations in India, said Dayanidhi Maran, Minister for Communications and Information Technology.
Mr. Maran said that within India, the competition for attracting multi-million dollar investments is essentially between Chennai, Bangalore and Noida as most firms had indicated their preference for these cities during his recent four-day visit to the U.S.
In an interview to The Hindu here on Monday, Mr. Maran said he held discussions with top executives of various companies, including Intel, UTStarcom, Flextronics, Cisco, AMD, Solectron and KLA-Tencor, and venture capital funds keen on investing in India.
According to industry sources, the cumulative investment plans of the companies would be in the range of $1.2 billion and the facilities would provide direct and indirect employment opportunities to several thousand people.
Plans for Chennai
Intel, which has been in talks with the Ministry for the last eight months, is close to finalising plans for its Assembly Test Manufacturing facility in Chennai, Mr. Maran said. It was earlier looking at China and Vietnam to set up the facility.
Noting that Craig Barrett, Intel chairman, indicated this to him during their meeting, Mr. Maran said there were, however, some issues regarding infrastructure, especially water that needed to be resolved.
Action required
Stating that he would be writing to Tamil Nadu Chief Minister Jayalalithaa on the issues raised by Intel, the Minister said he informed Dr. Barrett about the Centre's plans to set up a desalination plant in Chennai at a cost of over Rs. 1,000 crores.
Apart from briefing Prime Minister Manmohan Singh on the visit, Mr. Maran said he would be writing to the State Chief Ministers on the plans of the companies and, if necessary, would meet them. The State Governments, he added, were required to act fast as "one State's loss could be another's gain."
Rural connectivity
Mr. Maran said the $3 billion telecom equipment manufacturing company, UTStarcom, which specialises in providing solutions to connect rural areas, was likely to join hands with C-DOT to explore possibilities of the use of its technologies in India. UTStarcom is providing some equipment for the broadband services of BSNL.
Telecom infrastructure
In his meeting with Mike McNamara, CEO of Flextronics, the world's largest hardware manufacturer with revenue of $22 billion and employing 80,000 people worldwide, Mr. Maran highlighted the huge requirement to upgrade the existing telecom infrastructure in the country. He also pointed to the new guidelines that make 20 per cent local value-addition mandatory for telecom products supplied to state-owned telecom companies.
Flextronics, he said, was engaged in supplying products to leading telecom companies, including Nokia, Nortel and Ericsson. The company, he added, which was operating out of Bangalore, was expected to come out with more plans for India by the month-end.
India as R&D hub
On his meeting with senior executives of Applied Materials, one of the largest semi-conductor fabrication equipment manufacturers and IBM, one of the most advanced semi-conductor process companies, he said the two firms were urged to set up a state-of-the-art fab in India.
John T. Chambers, president and CEO of Cisco Systems, Mr. Maran said, indicated that the company had plans to make India the largest research and development hub outside the U.S. Mr. Chambers is expected to visit India shortly and discuss the possibility of joint collaboration with BSNL, C-DOT and the e-governance group in the Department of IT, he added.
The CEO and chairman of AMD, Hector Ruiz, accepted Mr. Maran's invitation to visit India and explore the possibility of setting up a fab.
The company, he added, controlled 10 per cent of the chip market and reacted positively to his suggestions that it participate in the e-governance programme of India.
Equipment providers
Solectron, a company engaged in providing equipment to telecom majors, including Nortel, he said, was seriously planning to come to India and was looking at Chennai, Bangalore and Noida.
The meeting with Kenneth L. Schroeder, CEO of KLA-Tencor, a leader in process control and yield management solutions for semi-conductor and related micro-electronic industries, was to ascertain the requirement of such companies. It was also to explore the possibility of setting up a `Fab City' to host chip makers.
Stating that the response of the companies was very good and his discussions were very focussed, Mr. Maran said the visit was part of the United Progressive Alliance Government's emphasis on promoting investment in the manufacturing sector.