Archive · 14 Sep 2026
Nokia’s India Expansion Faces High Local Component Costs
Nokia wants India to become a bigger place for making and exporting telecom equipment.
However, some parts made in India cost much more than similar parts from Vietnam or China.
The price difference can be between 20% and 80%, depending on the part.
Nokia says local suppliers must meet strict standards for quality, quantity and price.
Its factory in Chennai has already made more than 8 million telecom units.
About 40% to 45% of that factory’s production is exported.
Government programs are trying to help companies make more components in India.
Nokia is also adding artificial intelligence to the way its telecom networks are designed and managed.
Nokia plans to expand India’s role as a manufacturing and export base in its global supply chain.
Local components can cost 20% to 80% more than comparable supplies from Vietnam or China, according to Nokia India executive Vibha Mehra.
Nokia’s Chennai factory has produced more than 8 million telecom units and exports about 40% to 45% of its output.
Nokia assesses components on quality, quantity and price, with price the most common barrier to localisation.
The company is preparing for the next telecom Production Linked Incentive phase after the current scheme expires in March 2027.
- Who
- Nokia, including Vibha Mehra, its India Country Manager, and Indian component suppliers.
- What
- Nokia is expanding India’s manufacturing and export role while warning that high local component costs could limit localisation.
- When
- The Chennai factory has operated for around 17 years; the current telecom PLI scheme expires in March 2027, and the ECMS was launched last year.
- Where
- India, particularly Nokia’s factory in Chennai; competing component supply hubs mentioned are Vietnam and China.
- Why
- Nokia wants to reduce import dependence and manage risks from duties and geopolitical disruptions, but it must address local suppliers’ cost and qualification challenges.
- Company
- Nokia, a Finnish telecom equipment maker
- Local cost disadvantage
- Some India-sourced components cost 20% to nearly 80% more than supplies from Vietnam or China
- Chennai production
- More than 8 million telecom units produced
- Chennai exports
- About 40% to 45% of output is exported
- Localisation tests
- Quality, quantity and price
- Government support
- Telecom Production Linked Incentive launched in 2021; Electronics Component Manufacturing Scheme launched last year
- PLI timeline
- The existing telecom PLI scheme expires in March 2027