Electronics makers shop for cos to tap western clients

Time of India

6 days ago

Indian contract manufacturers of electronics goods are acquiring or partnering with companies globally to get access to their clients in the US, Europe and other markets, trying to tap into the opportunity from the tariff turmoil that has triggered a search for
alternative supply chains
.
They are also using this opportunity to acquire new technologies and capabilities, which would otherwise take years to develop in-house even as there is uncertainty over how long India's tariff advantages will last amid intense trade talks among countries. The development aligns with the government's push for self-sufficiency in electronics manufacturing and increasing
exports from India
.
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"Given the small window of opportunity, companies are taking the shortcut route of acquisitions to tap into clients looking to establish alternative supply chains beyond China. The idea is that you can sell not only what the target entity is selling, but also your own expertise and products," a top executive from a
contract manufacturing
firm told ET.
Companies like
Kaynes
,
Dixon Technologies
, Syrma SGS,
Cyient
, and Amber are actively acquiring and partnering with companies to access new technologies and tap into the global market.
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Consumer durables and electronics maker Amber Group is spending more than ₹400 crore to acquire a controlling stake in Israel-based industrial automation company Unitronics.
Calcom Vision
is setting up a unit to steer exports.
"Amber's
acquisition
is driven by the need to cater to aerospace and defence globally, which requires specific certifications. Acquiring a company that already possesses these certifications is crucial for Indian players tapping into global markets, as obtaining them independently is challenging and time-consuming," said an industry analyst, who did not wish to be named.
The acquisition provides the Amber Group with access to US and European clients in the defence industry, which is experiencing significant traction since the Ukraine and Gaza conflicts, he said.
Dixon has formed joint ventures with several Chinese component makers to acquire technology, investing over ₹1,000 crore in equity and capacity-building.
Kaynes and Syrma SGS have partnered with Korean companies to enter the PCB segment. They have also acquired stakes in US, Austrian and German companies to get access to their global clients.
Kaynes and Cyient did not respond to emails seeking comment, while the Amber Group declined to comment.
Syrma SGS posted a 29% sequential increase in exports of industrial components during the June quarter at ₹232 crore.
"Exports, we are primarily doing to Western Europe and the USA...The tariff uncertainty is definitely holding back customers from receiving large orders. Hopefully, within this quarter, this uncertainty will be a thing of the past," Syrma SGS managing director Jasbir Gujral said during a recent earnings call.
LED lighting and ceiling fan maker Calcom is setting up a unit to steer exports amid rising demand for alternative supply chains, executive director Abhishek Malik said.
"The tariff wars are the trigger for us to re-enter the export business after the pandemic. Two US companies have already audited us and our products are currently undergoing testing. We expect to hear from them by the end of the month," Malik said.
India currently faces a 10-15% tariff for lighting products exported to the US under the deferred reciprocal tariffs, while Washington's tariffs on China are unclear right now. If the tariffs work in India's favour, Malik sees a bulk of US brands working with Indian manufacturers, especially in lighting and fans. However, analysts warned that multiple acquisitions present concerns for investors regarding frivolous allocation of capital and returns.
"Investors could be worried that money is constantly being reinvested into the market in the form of new investments and acquisitions, but they are not seeing peak asset turns. Returns are being deferred, meaning investors have to wait longer to realise their profits," an analyst said.