American PC maker HP Inc is expanding local manufacturing of laptops and desktops in India in a bid to qualify for government contracts, the company said today. HP has started manufacturing multiple variants of laptops in its EliteBook, ProBook and G8 lines, along with desktop towers, mini desktops and All-in-One (AIO) PCs. The device are being manufactured at the company's Sriperumbudur, Tamil Nadu facility of its manufacturing partner Flex Ltd, a Singapore-based contract manufacturer with multiple facilities in India.
Before this, HP was only making select models of commercial desktops in India since August 2020. These, too, were being manufactured at the Flex facility.
According to the company, some of the notebooks and desktops that will now be made locally have qualified under the public procurement order of the Indian government and will be supplied to various government departments.
“We have worked with the Government of India and State Governments in their missions. With the expansion of local manufacturing, HP India will be able to better serve the needs of our partners and customers,” said Ketan Patel, Managing Director, HP India Market. Patel added that HP will expand the scale and reach of its manufacturing operations in future.
Local manufacturing is one of the key requirements for government orders. PC brands that want to qualify for such orders have to ensure that over 50% of the supplied devices are manufactured in India.
HP isn't the only manufacturers that's ramping up local manufacturing either. Acer announced, last month, that it's starting manufacturing of laptops at Dixon Technologies’ factory in Noida. The facility can produce up to 500,000 Acer laptops annually, the company said.
The competition in the commercial segment, particularly for government orders, is likely to intensify in 2022. Industry analysts believe that demand in the consumer segment is likely to slow down in 2022, however, the industry will continue to grow on the back of large orders from enterprise, government and education sectors, Mint reported last week.
Focus on government orders has also paid off HP’s key rivals, including Lenovo and Acer. Lenovo's focus on local production played a key role in winning back some of the lost orders from the government sector, said, analysts. It also helped Lenovo surpass HP and become the leading PC brand in India in the quarter ended September 2021, according to market research firm Canalys' Q3 report. Lenovo accounted for 27% of PC shipments during the quarter while HP dropped to the second position with a 24% market share.
In total, India shipped a record 5.3 million PCs in Q3 2021, growing 34% year-on-year (YoY), according to the Canalys report cited above. The pandemic led boom in demand for notebooks and tablets has made India one of the fastest-growing PC markets.