Cisco hops onto the India manufacturing bandwagon

Following the announcement of starting manufacturing in India to drive over $1 billion in revenue in May 2023, Cisco has launched its first production facility in Sriperumbudur, Chennai. The contract manufacturing facility has been set up in collaboration with Flex (which has a global collaboration with Cisco for production across geographies) installing an exclusive production line for the company’s Network Convergence System (NCS) 540 Series of routers and variations of the product.

Currently, these routers will be the only product to be rolled out from the plant to fulfil both domestic as well as export markets. The facility is expected to create over 1200 jobs. Also for Cisco, the new facility at Sriperumbudur, will be the sole manufacturing unit to produce the NCS 540 routers for the world. All demands will be fulfilled from the India unit.

As a part of its diversification strategy, Chuck Robbins, Chair and CEO of Cisco said that when the first conversation around manufacturing in India took place, the company’s decision was to build a full manufacturing node similar to other places around the world, including export capabilities to be successful.

“We are in the process of finalising our export licenses so that we will be able to turn this into an export hub,” he says, adding it was only a small representation of what would be possible in the long term.

Jyotiraditya Scindia, Minister of Communications, and Minister of Development of North Eastern Region, Government of India who was also present at the event said that the manufacturing collaboration was testimony to the manufacturing capabilities of India.

“The inauguration of Cisco's manufacturing facility in India, producing advanced telecom equipment is a testament to the country's growing Atmanirbharta in the global technology landscape. Certain that the factory will strengthen Prime Minister Shri Narendra Modi's vision of becoming a global manufacturing hub and amplify the holistic growth of India's telecom ecosystem,” he says.

In the first phase of production at the new manufacturing facility, the initial focus would be on one product and its variants. However, in the next phase, the company plans to enhance its innovation to include products like printed circuit board assembly components with several layers, and industrial-grade products that are built to endure severe environmental conditions.

The company has based its initial product manufacturing with the revenue focus on what has a heavy India usage and then to crack the export capabilities before expanding into other products. Depending on the success of the current plant, in the future, Cisco also sees India manufacturing sites having the potential to be factored into its global supply chain resilience as a hub for its products. In August, Cisco announced its full-year revenue ( fiscal ending July 2024) at $53.8 bn and has guided its FY25 revenue to be in the range of $55.0 billion to $56.2 billion.