US networking equipment manufacturer Netgear has been seeing rapid growth in India even as its worldwide revenues have remained stagnant for the last two years.

In an exclusive interaction with BusinessLine , its Co-founder and CEO Patrick Lo talked about how doing business in India is easier for them than in Japan or China and shared their plans to start manufacturing here. Edited excerpts:

Given the economic slowdown worldwide, how is Asia supporting your business?

We anticipated that from 2014 to 2016, our worldwide revenue will not grow. That means our revenue will continue to be flat at $1.3 billion annually for three years worldwide. So we are transitioning away from what we call commodity low margin business, wherein we worked with internet service providers and cable providers. In Asia Pacific, we’ve never sold low margin commodity products to internet operators. That’s why our growth has continued in Asia pretty significantly. Asia has been growing in double digits for the last 4-5 years, driven mostly by Japan, China and India.

What are you doing to expand your India operations?

We are looking at expanding R&D in India. Today, R&D in India is primarily around enterprise wireless LAN software. But we are looking at expanding that to different topics. We also want to look at the possibility of starting manufacturing in India. We will do the manufacturing here not just for India but also for exporting it worldwide. We do not own factories but many of our subcontracting partners already have manufacturing in India. How has protectionism impacted your business in China? Are you afraid of a similar situation arising in India?

I think China is like Japan and Korea. What they are trying to ensure is that there is enough room for local competitors to grow. So they carve out a market for foreigners and they will box you in so they won’t let you go over that. Japan has done that for years.

Japan doesn’t have a written quota but they have an unwritten quota — how much BMW or Mercedes can occupy the market. So China is pretty much doing the same thing. But I think there is enough market share quota in China for foreign companies to play.

But we really like the Indian market as it is a lot more open. Even though there are a lot of regulations and legislations in India to make sure the local guys can do well, it is still a lot more open because at least everything is written. Unlike in Japan where they don’t tell you what it is, you have to guess.

What are the biggest opportunities you see in India?

In India, time is on our side. As the Indian population is getting more and more affluent, they would demand higher quality networking products to connect to the internet. That’s why eventually our business will continue to grow.

For example, when iPhone initially came to China, it wasn’t very successful because of the high cost. But as Chinese became more and more affluent, then finally iPhone 5 and iPhone 6 were launched, they became very successful. That’s where we see the opportunity in India.

We will never get to 40 per cent marketshare in India, but we’ll be happy if we get 10 per cent. As per our estimates, we are at about 5-6 per cent of the market in India.

Are you working on newer product lines beyond switches and routers?

We believe that the future lies in Internet of Things. There are many opportunities for the consumer — both inside and outside the house. We will continue to look at those opportunities going forward. For inside the house, today we have the security monitoring cameras. But there are products like connected thermostats, doorbells, light bulbs and light switches etc but currently we are focusing on security cameras. But we will bring out devices that add value. We will introduce new categories by the year-end.

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