A sector in doldrums
When Nokia decided, in the first week of October, to suspend production at its handset-manufacturing facility in Sriperumbudur in Tamil Nadu, it was a setback not just for the mega brand but also the signal of a gradual decline of the electronics industry in the state.
Once Tamil Nadu's showpiece, the sector is in the doldrums due to the absence of supportive policies, tax problems and unfavourable World Trade Organisation agreements.
The 10-kilometre stretch between Sriperumpudur and Sunguvarchatram is home to many Fortune 500 companies that fabricate products for both the domestic and export markets.
With companies like Nokia, Motorola, Tapp Semiconductor, Foxconn, Dell, Samsung and Flextronics operating here, the corridor has attracted investments worth Rs 3500-4000 crore, according to state government sources.
The investments in the industrial corridor close to Chennai were led by Nokia, which, together with its supplier companies, put in around Rs 1800 crore.
An early entrant in the electronics hardware manufacturing sector, Nokia played a pivotal role in attracting other big players to Chennai.
So significant is the role of Nokia in the area that the rise and fall of its factory at Sriperumbudur mirrors the condition of the entire electronics industry in the state.
Text: TE Narasimhan, Business Standard
Image courtesy: Reuters