Cisco To Invest $60 Million In India, Start Manufacturing Operations, Says CEO John Chambers

18/06/2015 5:17 PM IST | Updated 15/07/2016 8:25 AM IST
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US Cisco Systems CEO John Chambers gestures during a press conference about digital technologies in France, at the headquarters of French employers organisation Medef in Paris, on February 17, 2015. AFP PHOTO / BERTRAND GUAY (Photo credit should read BERTRAND GUAY/AFP/Getty Images)

NEW DELHI — Cisco Systems Inc. will invest $40 million in India to expand its India operations, said John Chambers, CEO and chairman, in a meeting with reporters in New Delhi.

In addition, the company will invest $20 million to train 120,000 students in designing, building and maintaining computer networks. This skill-development program will be delivered through the cloud.

Chambers is going to retire from his current role and become executive chairman from July. He is in India with incoming CEO Chuck Robbins and has met Prime Minister Narendra Modi and other senior ministers on this trip.

"We have met PM Modi and expressed Cisco's support in fulfilling the Digital India program," said Robbins. He said that the company invests about $1.7 billion in its India operations every year.

India is still a very small part of Cisco's worldwide operations, contributing about 1.5 percent of its total revenue, Chambers said. That figure has been below his expectations, since the company started operations in India in 1995. He expects the business environment to be more conducive with Modi in power.

"If you look at the opportunities that India presents, the previous governments were not able to translate their vision and strategy into execution. We believe that will happen now," Chambers said, adding that he would like to see Cisco India contribute 5 percent of the revenues in the next five years. "That target is achievable."

This investment pales in comparison to the $10 billion the company is investing in China, which Chambers and Robbins visited before coming to India. But the company has been there for much longer than in India, and competitors such as Huawei have taken away marketshare since the government started promoting local makers of network equipment after Edward Snowden's revelations of spying by the National Security Agency.

Chambers said that India will get to those levels of investment in some time, and announced plans to start making equipment in India. "We have been manufacturing high-tech equipment in China for the last 20 years. Here we will start with products for broadband networks, defence industry and will need to set up supply chains, and logistics networks for that. Investment will ramp up fast."

Indian operations have grown on the services side. Cisco's Bangalore campus is the company's largest development center outside the United States with one in four engineers based here.

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