Cisco Systems will open a manufacturing facility in Chennai in south India that will initially make products for the domestic Indian market and also has announced it is setting up a globalization center in the country.
The plans were announced Wednesday in Delhi by Cisco Chairman and Chief Executive Officer John Chambers. The globalization center is aimed at driving the company's continued worldwide expansion. Called the Cisco Globalization Center East, the new center in Bangalore will be headed by Wim Elfrink, the company's senior vice president of customer advocacy, who will also be chief globalization officer.
The center will have 1,000 employees over the next two years, and the focus will be on local software development and services resources, according to a Cisco spokesman in India.
Cisco of San Jose, California, said last year that it will invest more than US$1.1 billion in India over the next three years, with most of the spending to expand its research and development (R&D) operations in the country.
Cisco first set up operations in India in 1995 and today employs more than 2,000 people in the country in its R&D center in Bangalore and sales offices across the country. The company will triple its staff strength in India over the next three to five years, Chambers said. The company also outsources software and product development to Indian companies.
In line with Cisco's outsourced manufacturing model, the company selected one of its partners, Hon Hai Precision Industry Co. Ltd. of Taiwan, to work with it on the manufacturing facility.
The Indian government's ministry of information technology and communications is promoting India as a manufacturing base for technology products, as manufacturing is expected to bring in jobs for semi-skilled people who have not benefited from the Indian software and services boom.
Chambers said in Bangalore last year that Cisco was considering the local manufacture of its products following a request from India's minister for information technology and communications, Dayanidhi Maran.
A number of multinational companies, including Nokia, Motorola, Dell, and Telefonaktiebolaget LM Ericsson, have decided to manufacture in India. Contract manufacturers such as Elcoteq Network and Flextronics have also set up manufacturing operations in India to target India's growing mobile communications market.