Musings – Abhay S. Kushwaha

On May 3, I wrote about Indian IT minister’s planned visit to woo Intel to set up a factory in India. From the report on eWeek, looks like he succeeded!

Intel Corp., the world’s largest computer-chip maker, plans to spend up to $400 million on a chip assembly and testing plant in India, Communications Minister Dayanidhi Maran said on Tuesday.

In addition to Intel, Mr. Maran has apparently been making rounds of other offices as well as is amply clear from his statements mentioning other potential investments. He threw up some big names there.

Anyway, what is especially cool about what he had to say about Intel’s agreement is the presence of Noida in the list of cities that are supposed to be in Intel’s potential site for their investment. Noida is just 5 hours away from me by road.

Potential locations include the southern port city of Madras, tech capital Bangalore or the Noida industrial township near the Indian capital, Maran said.

Madras (now called Chennai BTW) is where I’m betting Intel will finally settle down. The two factors I see being key in that decision would be that it is an international port and a State capital. If Intel wants this to be a manufacturing hub, they’ll need easy access to an export site. Chennai gives them that. Tamil Nadu (the State) will of course bend over backwards to accomodate their wishes in light of the investment and potential employment to be generated.

Bangalore is a city that has grown too fast for its own good. I don’t think it’s going to be able to cope up with this fast pace much longer and the city, already straining on the seams will likely see a collapse of infrastructure. In a recent report I read, Bangalore’s hospitality industry is charging rates equivalent to New York (one of the most expensive cities of the world) only because the demand if far in excess of supply. It might have surpassed Silicon Valley to become the biggest hub of IT, but in my opinion, given the state of affairs, a significant investment in that city would be foolhardy.

Noida is a cool city. Planned. Maintained. Indulged by the politicians. Almost a suburb of the National Capital. It has everything that Intel could want. The only reason I think Intel will not want to set up it’s infrastructure in Noida is because it’s not a port city and they might not get that kind of resources made available to them as they would in Chennai. IMHO, Noida might be a better city to be in, but not necessarily vis-a-vis Intel’s business point of view.

So let’s see where they finally land.