make in india
http://www.efymag.com electronics for you | July 2017 107
Market opportunities
India’s large domestic market is a big attrac-
tion for global manufacturers looking for
an alternative market. In China, the wide-
spread design and manufacture of low-end
electronics seems to be drawing to a close
as engineering and labour costs rise stead-
ily. On the other hand, India has a high
availability of skilled manpower at much
lower wages.
Mobile manufacturing in India is grow-
ing. According to a study conducted by
IIM Bangalore (IIM-B) and Counterpoint
Research, there was a sharp increase in
the total number of mobile manufacturing
facilities in the country, to almost 50, with a
combined production output of 180 million
units in 2016. The market share of locally
manufactured mobile phones (versus im-
ported) increased from 14 per cent in 2014
to 67 per cent in 2016. It is further estimated
to reach 96 per cent by 2020 (Fig. 1).
The government has introduced vari-
ous incentives under the PMP to increase
domestic value addition (local sourcing, as-
sembly, etc) from 6 per cent to more than 30
per cent over the next few years. The PMP
scheme (covered in detail later in the arti-
cle) aims to promote domestic manufacture
of mobile phones by providing tax relief andSudeshna Das is
senior executive
editor at EFYT
he Indian mobile handset market,
including smartphones and feature
phones, is booming. According to a
Morgan Stanley research report, India will
overtake the US next year as the second-larg-
est smartphone market in terms of units sold.
It will register nearly five times faster growth
than the world’s largest smartphone market,
China, where growth has decelerated.
The report also indicates that the Indian
smartphone market will grow annually at 23
per cent through 2018, accounting for 30 per
cent of the global growth during the period.
Around 192 million smartphones (11 per cent
of global units) will be shipped to India.
The burgeoning mobile handset market
in India presents an attractive opportunity to
manufacturers. Most of the global corpora-
tions are looking at India as a regional hub
for manufacturing and sales—to cater not
only to the Indian market but to the SAARC,
the Middle East and African markets as well.
The government of India’s recent notification
on the Phased Manufacturing Programme
(PMP) to promote indigenous manufacture of
cellular handsets has provided a fresh impe-
tus to this sector.
This report provides an insight into India’s
mobile handset manufacturing ecosystem,
focusing primarily on opportunities, domestic
value addition and policy framework.Are ‘Made In India’ Mobile Phones
In The Growth Phase?
Market SurveyFig. 1: The
changing
mobile phone
buying pattern
in India: Locally
manufactured
vs imports
(Source: IIM-B
and Counterpoint
Research)
“India can potentially be a world leader in the mobile
phone manufacturing ecosystem and this has to be
done in a phased manner.”
—Aruna Sundararajan, secretary, Ministry of
Electronics & IT (MeitY), Government of IndiaInputs from six senior industry experts and members
across India’s mobile manufacturing ecosystem were
taken for this report. The ecosystem includes:- Mobile brands/original equipment manufacturers
- Electronic components manufacturers
- Electronics manufacturing services providers
- Academia and the industry research fraternity
Methodology
38% 32% 28%
19%31%67%83%
88%
93% 96%0%20%40%60%80%100%120%0501001502002503002011 2012 2013 2014 2015 2016 2017 2018 2019 2020%age contributionUnits in MnImports Domestic Manufacturing$11,670$13,765$15,712$18,212$20,073$653 $1,305$2,608$4,363$6,4425.6%9.5%16.6%24.0%32.1%0%5%10%15%20%25%30%35%$0$5,000$10,000$15,000$20,000$25,0002016 2017 2018 2019 2020% Local Value AdditionTotal Value of Components (US$, Millions)Total Components Value Total Local Components Value % Local Value AdditionPhase I Phase II Phase III