India Emerges As Second-Largest Manufacturer Of Mobile Phones: What Led To This?

India has become the second-largest mobile manufacturing country in the world, producing over 2 billion mobile phones between 2014 and 2022. According to Counterpoint Research, India's mobile phone production rose at a Compound Annual Growth Rate (CAGR) of 23%.

Between 2014 and 2022, mobile phone shipments that were 'Made in India' crossed 2 billion cumulative units. In 2014, only 19% domestic shipments were made in India, while in 2022, 98% of mobile shipments were made domestically.

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How was this achieved?

According to the report, various factors that made this happen include internal demands, increased digital literacy, and government incentives to manufacturers. Initiatives like the Phased Manufacturing Programme (PMP), Make in India, Production Linked Incentive (PLI), and Atma-Nirbhar Bharat contributed to this development.

"India has come a long way in mobile phone manufacturing. We have seen local manufacturing increase over the years to meet domestic demand. In 2022, more than 98% of shipments in the overall Indian market were ¡®Made in India¡¯, compared to just 19% when the current government took over in 2014. We have also seen increasing local value addition and supply chain development in the country," Counterpoint Research Director Tarun Pathak said in a blog post.

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"Local value addition in India currently stands at an average of more than 15%, compared to the low single digits eight years ago. Many companies are setting up units in the country for manufacturing mobile phones as well as components, leading to growing investments, increasing jobs and overall ecosystem development. The government now intends to capitalize on its various schemes to make India a ¡®semiconductor manufacturing and export hub¡¯. Going forward, we may see increasing production, especially for smartphones, as India gears to bridge the urban-rural digital divide and also become a mobile phone exporting powerhouse," he added.

The report quoted analyst Prachir Singh who claimed that the government is trying to turn India into a semiconductor hub and has proposed a semiconductor PLI scheme that would dish out incentives to companies.

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To help this plan materialise, the government is investing $1 trillion (about ?83,21,600 crore). If this trajectory sticks, India could become a manufacturing behemoth in the near-future for smartphones and semiconductors.

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