Can India Lead The World In Mobile Phone Manufacturing By 2020?

Over the past couple of years, the mobile ecosystem in India has been revolutionised. This industry has now helped the nation to become the world’s second largest mobile phone manufacturer after China, although exports of the devices are still in the nascent stage. Currently, the country not only boasts of the largest number of smartphone consumers, but also the fastest growing production and manufacturing facilities. The government’s ‘Make in India’ initiative has been driven by a reduction in duty. International EMS giants such as Wistron and Foxconn have established their manufacturing units in India. And during the first quarter of 2018, India became the leading market for mobile apps.

- Nijhum Rudra

Recently, the India Cellular and Electronics Association (ICEA) stated that the yearly shipments of cellular devices in the country have escalated from 3 million devices in 2014 to 11 million devices in 2017. The country now accounts for 11 per cent of the worldwide mobile manufacturing output, a figure that was only 3 per cent in 2014. Moreover, the mobile manufacturing industry is now one of the leading sectors in India in creating employment opportunities. The global human resource consulting firm Randstad India reported that India’s mobile phone segment has generated over 4 million direct and indirect jobs over the past few years.

Under the government’s Phased Manufacturing Programme (PMP), the overall investment by the global component and device companies is speculated to cross 50 billion. The PMP scheme was launched by the government in 2017 to boost domestic manufacturing of mobile phones and also to create a robust local ecosystem for this. Pankaj Mohindroo, president of the ICEA, says, “I am very hopeful that in the next two years, with such conducive policies, there will be additional massive investments coming into the mobile phone components sector.”

Challenges faced by India’s mobile and electronics manufacturing sectors

Highlighting the challenges of India’s manufacturing units, Faisal Kawoosa, founder and research analyst at techARC, says, “Manufacturing is a long term commitment, so the decision has to be taken keeping a very long term view in mind. Global companies that drive most of the electronics manufacturing do not look at India in isolation. They compare it with other global destinations, and still find areas where India can improve further.”

Some of these areas include:

Access to and the cost of capital

Infrastructure like ports, power, water, etc, which can support importers as well as exporters