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    Thursday, May 11, 2023

    Cisco to Manufacture in India as it Targets Over $1 Billion

    Global telecom and networking equipment maker Cisco will aim for $1 billion worth of domestic production and exports over the next few years from its new manufacturing unit to be set up in Tamil Nadu, the company’s chairperson and global chief executive officer Chuck Robbins said.

    Robbins, who is visiting India this week, said that the new production unit will start with the manufacturing of network switches and high-end routers. The new unit will be a full-scale manufacturing node from where the company hopes to export these products to Europe and other regions, he said.

    “Our customers are fundamentally reordering and re-architecting their technology infrastructure to deal with a fully digital world. We see it happening in countries, much like we see it happening here at a pace that probably is faster than anywhere else in the world,” Robbins said.

    With the new unit, the company also hopes to diversify its supply chains in the region and for the world, he said. Cisco currently has manufacturing units in China, Taiwan, and Korea in the region. The new manufacturing unit at Tamil Nadu would be in partnership with an original design manufacturer, Robbins said.

    “Pre-Covid, supply chains were built primarily around efficiency. Now they are built around the combination of efficiency but with a heavy focus on resilience. This was a decision about the growth and export opportunity in India,” he said.

    The Tamil Nadu manufacturing unit, likely to be a brownfield operation, will also support testing, development, and logistics, as well as expand Cisco’s in-house repair operations, the company said.

    “Today's announcement marks a significant milestone to power the next phase of growth for Cisco. This investment will enable us to bring state-of-the-art technologies to more people and businesses and help accelerate India’s transition into a leading digital economy,” Daisy Chittilapilly, the president of Cisco India & SAARC region said.

    The idea behind setting up a new manufacturing unit in India was to augment the company’s supply chain

    The company did not disclose the location of its factory unit in Tamil Nadu or if it had chosen to participate in the production-linked incentive (PLI) scheme for the manufacturing of telecom equipment.

    The Tamil Nadu unit, which is likely to start rolling out products over the next 12 months, is likely to create roughly 1200 jobs in the manufacturing ecosystem, Robbins said.

    Apart from generating revenue from its networking and telecom equipment business, Cisco is also looking to expand its presence in the software domain and will aim target generating 50% of its overall revenue from the software by the end of the fiscal year 2025, he said.

    Cisco is also working closely with telecom companies such as Bharti Airtel and Reliance Jio Infocomm on public 5G as well as some other customers in the private 5G space for the manufacturing sector, Robbins said.

    “Private 5G is a great opportunity. We see it emerging in the manufacturing sector for working on low-latency applications. We will continue working with customers and that is a big focus for us,” he said.

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