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Saturday, March 13, 2010

Will Tejas survive Chinese competition?

Indian Innovators get awards but no rewards is a common refrain.
The case of anti dumping duty on Chinese SDH equipment raises two old issues- do we need to support local innovators and if so do we know how to support our innovators?
Case in brief : based on complaint by Tejas government imposed anti-dumping duty and court had set aside that imposition. Supporters of (few) Indian innovators say that protection is essential for survival but ( large number of) free market pundits argue that protection increases capital cost of service providers and if Chinese manufacturers are willing to supply at below (Indian) cost then why bother, the benefit goes to millions of Indian customers in the form of low charges.
Some facts:
1. Well known is Chinese government support for Huawei .
2. Every other telecom network equipment manufcaturer received their govt support at initial stage.
Ericsson was founded in 1876 by Lars Magnus Ericsson, a young mechanic who set up a small workshop taking in telegraph instruments for repairs. They made it big in telephone exchange (AXE) with support from their country operator Televerket. Acceptance in the home market provided them needed eligibility criteria for global supply and they expanded to Austria, France and Saudi Arabia etc.
3. Prof Ashok jhunjunwala has tons of data to prove that local capabilities played a significant role in keeping capex costs low in India.

Will Tejas survive to receive one more award??

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