The Indian mobile phone industry is command by Chinese manufacturers.
The huge demand for budget phones has made India an tillable market for the same. India becomes Net Exporter of mobile phones
But can we decrease dependency on Chinese goods and be self sufficient in meeting the domestic demand as well as exporting 100 per cent “Made in India” phones?
So far, India’s mobile phone imports were always higher than its exports In the last financial year 2019-20, India exported 41.5 million mobile phones and imported 5.6 million phones a net export of 36 million units.
But does it mean India is manufacturing these Mobile Phones?
High export of mobile phones doesn’t mean they are being produced entirely here and increase Jobs in india.
According to the India Cellular and Electronics Association, mobile phone manufacturing units in the India have grown From just two in 2014 to 268 in 2018.
Further data shows that, More than being made in India, cell phones are mostly assembled in India good for economy.
THE ASSEMBLING HUB
In 2017, the government launched a phased manufacturing programme under which it incentivises local sourcing of parts.
Under this, importing products such as chargers, microphones, cameras (for phones), etc. would invite custom duties, but not for the parts required to manufacture them.
Consequently, importing a full mobile phone would be costlier than importing its parts and assembling them in India.
Although it has indeed increased local value addition in mobile phone manufacturing in India from 6% in 2016 to 17% in 2018.
Chargers, surface-mount technology, packaging, camera modules, etc
Over 300 components and sub-components are required to manufacture one mobile phone.
WHAT ABOUT MADE IN INDIA?
With the same policy, a l00% “Made in India” phone would be “virtually impossible” in such a scenario.
It would take years of policy reforms for anything beyond 5o% of value addition.
It took china roughly two decades to clock a value addition of over 60 per cent.
Going forward, policy reforms will be helpful, but they will take small time to boost.
We cannot continue hiking custom duties.
Recent steps of performance linked incentives and reducing corporate tax rates will invite bigger companies to invest and manufacture in India.
Once the big players come in, local small manufacturers will also get a boost and increase jobs. India becomes Net Exporter of mobile phones