Arduino is considering manufacturing in India. The startup, best known for its open-source microcontroller boards, hopes to curb the rise of counterfeit boards and meet 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 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 user base is very large for the Arduino IDE, the amount of genuine products we sell in the Indian market is very negligible because people cannot afford economical original products. because of high import duties on finished electronic products,” he said. “So people mostly buy alternatives, clones, and sometimes these knockoffs are from China.”
Currently, Arduino clones are available for less than half the price of the original board. The latter also includes import duties. Therefore, by starting local production, Arduino would be selling its boards in India at discounted prices — in line with those of its Chinese counterparts.
However, the clone board problem is not limited to India, Violante admitted, adding that the company currently sells one prototype board for every five to six clones on the market.
“It’s a challenge, because we’re open source and we make money from selling the source material,” he noted. “So clones and fakes are a big part of the market.”
Arduino is trying to tackle the problem of counterfeit boards worldwide by making its hardware more sophisticated, which makes counterfeiting more difficult.
“This gives us a competitive edge with continuous innovation,” Violante said. “[The new boards] use more sophisticated microcontrollers, more sophisticated power section that is 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 lawmakers, including India’s electronics and IT minister Rajeev Chandrasekhar.
India is offering cash rebates and subsidies to global manufacturers to become a manufacturing hub in a bid to compete with China. As a result, domestic electronics manufacturing in the country rose by more than 111% to $99 billion in the 2022-23 financial year, from $47 billion in 2017-18, according to government figures released to parliament last week. However, most of it comes from the development of local mobile phone production. The country is already the second largest mobile phone manufacturer, with over 99% of its total domestic mobile phone sales comprising units made in India. The government wants to go beyond just assembling mobile phones and increase local production even for components such as displays and semiconductors.
Arduino is currently looking at both large international EMS companies and smaller local players in India that specialize in the production of electronic boards or development boards, Violante told TechCrunch.
The executive said the company could initially consider building $27 Uno R4 Wi-Fi in the country, which was released globally earlier this year. It aims to appeal to the masses with specs that include a 32-bit Cortex M4 processor, 32 KB of RAM and 256 KB of flash storage. However, over time, it may start producing the business-focused Pro-series models launched last year.
Violante said Arduino is also trying to tie up with Indian institutes to build brand awareness among students and become part of their local curriculum. Additionally, partnerships with institutes will help the company connect with companies that work with them. It is already partnering with Tata Consultancy Services (TCS) in the US and plans to extend this partnership to India. Additionally, the country’s original Arduino startup, which plans to specifically address local demand, may move toward exporting its locally made boards to other countries over time, as the startup—unlike many others— it does not rely on China for manufacturing.
