Amazon To Set Up First Manufacturing Unit In India
PUNE, India – U.S. e-commerce giant Amazon will begin manufacturing its devices in India, starting with the production of Fire TV Sticks in the southern city of Chennai later this year, the company said on Feb. 16.
“We are delighted to announce Amazon’s first manufacturing line in India to produce hundreds of thousands of Fire TV Stick devices every year,” tweeted Amit Agarwal, global senior vice-president and country head, Amazon India.
“This further reiterates our commitment to ‘Make in India’, contributing directly to the local economy, creating jobs and boosting Indian innovation.”
Amazon’s manufacturing move comes at a time when the company is embroiled in a legal battle against the $3.4-billion sale of Kishore Biyani-owned Future Group’s retail assets to Mukesh Ambani’s Reliance Industries.
The production will be carried through Cloud Network Technology — Amazon India’s contract manufacturer in Chennai and a unit of global chip manufacturer Foxconn.
The Chennai unit will be able to produce “hundreds of thousands” of Fire TV Stick devices each year, the e-commerce major said, adding it will evaluate scaling capacity to other cities depending on demand.
Amazon’s Fire TV Stick is a streaming video player and is one of the company’s device offerings, which includes e-book reader Kindle, virtual artificial intelligence assistant Alexa and voice-controlled speaker Echo.
Fire TV has more than 50 million monthly active users around the world, according to Amazon’s fourth-quarter earnings results.
“Under the leadership of PM @narendramodi, electronics manufacturing in India has recently attracted some of the biggest investments from global giants. Happy to share @amazonIN is the latest to join this success story of India,” the country’s Information Technology Minister Ravi Shankar Prasad said in a tweet after a virtual meeting with Agarwal and Chetan Krishna, Amazon’s vice-president of public policy.
“Amazon is looking to diversify its manufacturing, and they have exported a lot of items from India in the past few years,” Satish Meena, senior forecast analyst at Forrester Research, told Zenger News.
“There is an ecosystem that is building in India for consumer electronics devices like [consumer electronics brand] boAt and others. There is an incentive from the government, and they want to take this chance to start manufacturing in India,” Meena said.
In April 2020, the Indian government announced a production-linked incentive scheme for large-scale electronics manufacturing to boost the production of mobile phones and specified components like assembly, testing, and packaging units.
Under the scheme, the government will extend an incentive of 4-6 percent on incremental sales (over the base year) of goods manufactured in India and covered under target segments to eligible companies for five years.
Since the launch of the incentive scheme, a host of global players have set up their manufacturing bases in India.
iPhone maker Apple and South Korea-based Samsung are already manufacturing their smartphones in the country.
US-based electric vehicle manufacturer Tesla recently registered an India unit in Bengaluru and will commence operations with a research and development unit in the southern city.
Consumer electronics brand boAt raised $100 million in January from an affiliate of private equity firm Warburg Pincus to manufacture in India under the Make-in-India initiative.
While Amazon’s manufacturing of Fire TV sticks will not fall under the scheme, it is part of Amazon’s big push into India as it seeks to consolidate its position in the e-commerce market.
In January 2020, Amazon Chief Executive Officer Jeff Bezos said the firm would invest $1 billion to digitize 10 million small and medium businesses to help enable $10 billion in cumulative exports by 2025. The investment also seeks to create 1 million jobs by 2025.
(Edited by Gaurab Dasgupta and Amrita Das. Map by Urvashi Makwana.)