Google seeks suppliers to move Pixel production to India

Google has commenced initial discussions with several companies in India, including Lava International Ltd., Dixon Technologies India Ltd., and Bharat FIH, the Indian unit of Foxconn Technology Group, Bloomberg reported while citing insiders, who preferred to remain anonymous due to the confidentiality of the matter.

Google is set to join the ranks of global technology companies shifting their production to India. The company is in discussions with potential partners who have secured Prime Minister Narendra Modi’s production-linked financial incentives, which have successfully promoted domestic manufacturing. 

Apple has already taken advantage of this program to expand its supplier network in India, resulting in a significant increase in iPhone production, surpassing $7 billion in the fiscal year ending in March 2023.

Modi has been pitching India as an alternative manufacturing hub, as more companies are becoming wary of the risks of depending on China after its harsh Covid lockdowns and a trade war between Washington and Beijing. Modi is scheduled to visit the US this week where his delegation is expected to hold talks on topics including a removal of tech trade barriers between the two countries.

In May, India’s Technology Minister Ashwini Vaishnaw met with Google Chief Executive Officer Sundar Pichai at the company’s headquarters in Mountain View, California, for a conversation that revolved around Modi’s local manufacturing drive and India’s state-backed technology push.

Key Google executives who visited India this month for the partnership talks included Ana Corrales, operating chief of its consumer hardware arm, and Maggie Wei, a senior director of global sustaining product operations, the people said.

Representatives for Lava, Dixon, Google and Foxconn didn’t respond to requests for comment.

Google built about 9 million Pixel smartphones last year, according to Counterpoint Research, and the discussions in India underscore its plans to move production beyond China and Vietnam. The Pixel is among the most sophisticated smartphones, and Google uses its flagship hardware product to showcase what its Android operating system and apps are capable of when optimized.

India is a key growth market for Google’s services but the company has largely watched from the sidelines as cheaper Chinese phones have dominated the region. Local assembly could help drive up Pixel sales, and if the phone effort is successful, Google could also move production of other hardware such as speakers to India, the people said.

Still, there is no certainty Google’s talks will result in a deal and the company could opt not to build the Pixel in India, the people said.

(With Bloomberg inputs)

Updated: 20 Jun 2023, 02:06 PM IST