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Mobile manufacturing a $230 billion opportunity: Report


Date: 02-11-2018
Subject: Mobile manufacturing a $230 billion opportunity: Report
NEW DELHI: Mobile handset manufacturing in India has the potential to become a $230 billion export-oriented industry by 2025, creating 47 lakh jobs, if the government provides the necessary policy boosts in terms of tax incentives and ease of doing business, suggests an industry report. 

As per an India Cellular & Electronics Association (ICEA) report, mobile manufacturing industry in India has been growing rapidly on the back of strong domestic demand. As many as 120 manufacturing plants were set up in the country since 2014. Around 225 mobile phones were manufactured in India in 2017 against 58 million in 2014.

India’s mobile manufacturing industry currently produces primarily for the domestic market. According to the ICEA report, the total value of mobile phones manufactured here in 2017 was $20 billion. Only $100 million worth of these devices were exported. 

However, the domestic demand is predicted to taper-down. Between 2014 and 2017, the Indian smartphone market grew over 37% in value per annum, from $9 billion to $22 billion. These numbers include locally manufactured handsets as well as imports. The strong growth seen between 2014 and 2017 is starting to slow down with a projected growth rate of 14% per annum, half the previous growth rate and that could stunt the growth of the industry. 

The report suggests moving from ‘Making in India for India’ to ‘Making in India for the world’ to fuel further growth. 

Globally, mobile handset ecosystems are largely organised around a few large companies like Samsung or Apple and their unique supply chains. Improving ease of doing business by introducing measures to allow easy import of capital goods, easy and cheaper availability of capital, improve turnaround time at ports, streamlining GST rules, and refining e-waste disposal rules could be some steps taken to attract the larger players and the accompanying ecosystems to India.

The government needs to impose more duties on imported mobile phones and components to boost local manufacturing, ICEA suggested in their report. 

If the government fails to attract global manufacturers and the industry is restricted to manufacturing only for the domestic market, it would be likely to manufacture only 450 million handsets and employ 18 lakh people for an industry worth around $80 billion by 2025 – a lost opportunity cost of $150 billion.

Source: economictimes.indiatimes.com