India Inc warms up to RFID

It's not longer mere talk. Radio Frequency Identification (RFID) is silently making its presence felt in India and everybody from the big business houses, government, defence to farmers are flaunting it.

Automobile players like Mahindra & Mahindra, one of the earliest adopters of the technology are now going all out to embrace the technology.

"We will achieve 80 per cent RFID implementation -- up from the current 25 per cent over the next three years -- to cover areas like parking, warehousing, vendor tracking, security tracking, vehicle tracking to name a few applications," Arun Jaura, senior vice president (Product Development), M&M told Business Standard.

If automobiles are sporting the technology, so also are cattle, which are equally common on the Indian roads. With India being the largest producer of milk globally, cattle owners like Chitale farm in Bhilewadi near Pune have implemented RFID chips in its cattle for collecting feeding data, breeding data as well as milking record of the animals, besides tracking.

More recently, Tata Consultancy Services is in talks for a RFID deployment covering seven million cattle in Gujarat, the largest milk producing state in the country. Even the Agriculture ministry has announced RFID pilots for cold chain management in its budget.

Over the last 8-10 months corporates are experimenting with innovative uses of RFID for applications like jewelry tracking, asset tracking for computers, laptops, library management and file and document management to name a few.

RFID applications are coming up across a wide range of verticals, Ganesh Iyer, general manager (Marketing), Intercode Solutions, who is working on projects as varied as library management for tracking of books, asset tracking for Airtel and Vishal Megamart affirmed.

The reason for this widespread adoption of RFID is the huge downfall in the cost of RFID tags. Gemini Traze RFID, a subsidiary of Gemini Communications Ltd has set up India's first RFID tag manufacturing facility at Chennai.

"We have manufacturing capacities of 100 million tags annually and will bring the costs of tags down to Rs 10 from Rs 40 in the next 3 months," said Pradhyumana Venkat, chief executive officer, Gemini Traze RFID.

Further the government's semiconductor policy announcement will encourage FAB plants to setup in India which will bring costs further down as MNCs start manufacturing chips in India. Intel has already announced manufacturing of chips for RFID readers in India. Retail players like Bharati, Reliance, Kishore Biyani's Futures Group are also experimenting with pilots.

"Retail players are showing interest and there will be a few implementations in this sector by 2008," says Iyer adding, "When the much hyped retail deployment of RFID takes place mass deployments in a hundreds of millions will further reduce costs to Rs 5."

Asserting that the interest for RFID is picking up in the country, T S Rangarajan, head RFID, Tata Consultancy Services said, "The RFID market will grow at 100 per cent year-on-year to be a $3-5 billion market in India by 2009-10."

At TCS the number of enquires have doubled in the last 12 months, he added. At Intercode Solutions which works in the field of Automatic Identification and Data Capture (AIDC) including barcodes, inter labels and other such technologies, "RFID contributions to the over all revenues will increase from 15-20 per cent currently to 50 per cent of our over all revenues in the next three years," enthused Iyer for the potential of the technology.

Radio-frequency identification (RFID) is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. An RFID tag is an object that can be attached to or incorporated into a product, animal, or person for the purpose of identification using radio waves.

Chip-based RFID tags contain silicon chips and antennas. Passive tags require no internal power source, whereas active tags require a power source. There are concerns of viruses spreading while reading RFID chips. The biggest concern, though, with RFID is privacy as the tag can be read from a distance and report on your whereabouts.