Context:
Recently, the Union Minister for Electronics and Information Technology announced that India became the World’s 2nd largest mobile manufacturer after China.
Overview of Mobile Manufacturing Growth:
- India significantly increased mobile manufacturing units from only 2 in 2014 to over 300 in 2024.
- In 2014 -15 only 26% of the mobile phones which were being sold in India were made in India this figure increased to 99.2% in 2024 of all mobile phones which are sold in India are made in India.
- The manufacturing value of mobile phones has surged from ₹18,900 crore in the Financial Year 2014 to ₹4,22,000 crore in the Financial Year 2024.
- The exports, which were almost non-existent in 2014, have now surpassed ₹1,29,000 crore.
- The sector also created approximately 12 lakh direct and indirect jobs over the decade.
Key Drivers of Mobile Manufacturing Growth:
China+1 trend: It refers to countries diversifying their supply chains to reduce reliance on China, driven by geopolitical tensions and supply-chain issues.
- India has emerged as a strong alternative for manufacturing and supply chains. Recent trade data highlights this shift, with India closing the gap in mobile phone exports.
- In 2023-24, while China and Vietnam experienced export declines of 2.78% and 17.6%, respectively, India’s mobile phone exports grew by over 40%.
India’s domestic demand: It is driving growth in mobile phone manufacturing, supported by a large consumer base and rising disposable incomes.
- Domestic demand has grown significantly, from US$ 12 billion in FY14 to US$ 36 billion in FY24, at a compound annual growth rate (CAGR) of 13%.
Global Competitiveness: India is boosting its global competitiveness in mobile phone manufacturing by increasing production scale and joining global value chains (GVCs).
- The Union Budget 2024-25 lowered the basic customs duty on mobile phones, PCBs, and chargers from 20% to 15% and exempted critical minerals and inputs needed for smartphone manufacturing.
Govt Initiatives:
The ‘Make in India’ initiative: It boosts the domestic production of critical components and sub-assemblies such as chargers, battery packs, mechanics of all types, USB cables, Lithium Ion Cells, speakers and microphones, display assemblies and camera modules.
India Semiconductor Mission 2021: It is an independent Business Division within the Digital India Corporation that aims to build a vibrant semiconductor and display ecosystem.
- An 83% increase in semiconductor allocations to ₹7,000 crore was announced in 2025 budget.
Production Linked Incentive Scheme (PLI) 2020: It boosted mobile phone manufacturing in India through key strategies like offering financial incentives based on production levels, encouraging manufacturers to increase output and investing in local facilities.
- A 55% rise in the PLI scheme for mobile phone manufacturing to ₹9,000 crore was announced in budget 2025.
Phased Manufacturing Programme (PMP) 2017: It aims to promote the domestic production of mobile phones and create a strong local manufacturing ecosystem for mobile devices.