Arduino is considering manufacturing in India. The startup, best known for its open source microcontroller boards, hopes to limit the rise of counterfeit boards and meet the growing demand from India's young population.
The Italian company is currently exploring partnerships with electronic manufacturing services (EMS) companies in the South Asian nation to begin its local production as early as the first quarter of next year, CEO Fabio Violante told TechCrunch in a virtual interview. . This marks a substantial change from the company's current practice of producing all of its boards in Italy.
India is the largest market for Arduino IDE downloads, with 3.2 million. The country also has local branches of global Arduino distributors such as DigiKey, Mouser Electronics and Avnet. However, India's contribution to its customer base is currently less than 1%. Violante believes that fake Arduino boards are the main reason for this discrepancy.
“The strange situation for us in India is that although the community is very large and the Arduino IDE user base is very large, the number of original products that we sell in the Indian market is very negligible because people cannot afford the original products, especially due to high import duties on finished electronic products,” he said. “So people mainly buy alternative products, clones, and sometimes those imitations are from China.”
Currently, Arduino clones are available for less than half the price of the original boards. The latter also includes import duties. Therefore, by starting local manufacturing, Arduino would sell its boards in India at discounted prices, in line with its Chinese counterparts.
However, the problem of cloned boards is not limited to India, Violante acknowledged, adding that the company currently sells one original board for every five or six clones on the market.
“It's a challenge, because we are open source and we make money by selling the original hardware,” he said. “Therefore, clones and counterfeits represent a large part of the market.”
Arduino seeks to address the problem of fake boards globally by making its hardware more sophisticated, making it harder to counterfeit.
“This is giving us a competitive advantage by continually innovating,” Violante said. “(The new boards) use more sophisticated microcontrollers, more sophisticated power sections that are not easy to copy and paste.”
Last week, the executive visited New Delhi to attend an investor-focused event organized by state agency Invest India and met with government officials and policymakers, including India's Minister of State for Electronics and Information technology Rajeev Chandrasekhar.
India has been offering rebates and subsidies to global manufacturers to become a production hub, in a bid to compete with China. As a result, domestic electronics manufacturing in the country has increased more than 111% to $99 billion in the 2022-23 financial year, up from $47 billion in 2017-18, according to government data shared on parliament last week. However, most of it is due to the growth of local mobile phone manufacturing. The country is already the second largest mobile phone manufacturer, with more than 99% of all its domestic mobile phone sales made up of units manufactured in India. The government wants to go beyond simple assembly of mobile phones and increase local production even of components such as displays and semiconductors.
Arduino is currently considering both large international EMS companies and smaller local players in India, which specialize in producing electronic boards or development boards, Violante told TechCrunch.
The executive indicated that the company could initially consider manufacturing its $27 model A WiFi R4 in the country, which was launched globally earlier this year. It aims to appeal to the masses with specifications that include a 32-bit Cortex M4 processor, 32 KB of RAM, and 256 KB of flash storage. However, over time, it may begin producing its enterprise-focused Pro series models, launched last year.
Violante said Arduino is also looking to connect with Indian institutes to create brand awareness among students and be part of their local curriculum. Additionally, partnerships with institutes will help the firm connect with companies that work with them. She already works with Tata Consultancy Services (TCS) in the US and plans to expand that partnership in India. Furthermore, the initial Arduino startup in the country, which plans to specifically address local demand, may move towards exporting its locally manufactured boards to other countries over time, as the startup, unlike many others, does not It depends on China for its manufacturing.
