Cisco Eyes India To Diversify Supply Chain, Aiming For $1B In Exports And Production
The tech giant is working with India to help ease its supply chain challenges by kicking off manufacturing in the country to the tune of more than $1 billion in combined domestic production and exports in the coming years.
Cisco CEO Chuck Robbins
Cisco Systems is turning to India to help the tech giant modify and diversify its global supply chain, Cisco Chairman and CEO Chuck Robbins said Wednesday.
Cisco will expand its footprint in India and begin manufacturing in the country. The company is targeting more than $1 billion in combined domestic production and exports in the coming years.
Robbins made the announcement from New Delhi, following a meeting with Prime Minister Narendra Modi, as well as what the company is calling a series of strategic engagements with Dr. S. Jaishankar, external affairs minister; Rajeev Chandrasekhar, union minister of state for entrepreneurship, skill development, electronics and technology; B.V.R. Subrahmanyam, CEO of NITI Aayog; and K. Rajaraman, the country’s telecom secretary.
The company said the move is part of its strategy to create a more diverse and resilient global supply chain, a challenge that has plagued Cisco since the start of the COVID-19 pandemic that sparked component and supply shortages around the globe.
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Cisco, during its most recent earnings call in February, said the global supply chain was loosening and the company was able to chip away at its once record-breaking backlog by 6 percent sequentially, thanks in part to Cisco’s channel partners who were able to get solutions into the hands of customers, a process that had been held up by the previously uncooperative supply chain.
“We increased product deliveries and saw significant reductions in customer lead times. As product delivery increased, channel inventories also declined as partners were able to complete customer projects,” Robbins said during the fiscal Q2 2023 call.
San Jose, Calif.-based Cisco disclosed in February that it still had $2 billion worth of software orders in product backlog.
The latest announcement with India will also help Cisco cater to Indian customers and support the country’s vision of becoming a global manufacturing hub. The company began operations in India in 1995 and the country today is Cisco’s second largest R&D center outside the U.S., according to Cisco.
The company is currently building core manufacturing capabilities in India, including testing, development and logistics, and expanding in-house repair operations, Cisco said.
“Today, we are announcing strategic investments in Indian manufacturing capabilities as the next step in delivering cutting-edge technologies to our customers in India and across the globe,” Robbins said in a statement. “Fueled by a rapidly developing digital economy, India is a focal point of innovation and business for Cisco, and we remain deeply committed to our partnerships here.”
Cisco is expected to announce its Q3 2023 earnings later this month.