Mobile handsets 5th largest export; output grows 21-fold in 10 years

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If mobile handset manufacturing is emerging big time in India, the Production Linked Incentive has played as a major bait in luring giants such as Samsung and Apple to the shores of the country, industry body India Cellular and Electronics Association (ICEA) has stated, quantifying the value leap as 21 times to reach Rs 4.1 lakh crore in the past 10 years.

Assembly lines in India now churn out 97% of the total handset demand in the country. Moreover, as much as 30% of the production in 2023-24 is supposed to be shipped out of the country.

“Mobile phone production surged from Rs 18,900 crore in 2014-15 to an estimated Rs 4,10,000 crore in FY’24, registering an increase of 2000%. In 2014-15, mobile phone exports from India were a mere Rs 1,556 crore. The industry expects to end FY24 with an estimated export of Rs 1,20,000 crore. This would mean a 7500% increase in exports over a decade,” ICEA said in a statement.

The two brands that have taken the led exports of handsets from India are Apple and Samsung.

India-made phones are increasingly covering most parts of the face of the earth such as the Netherlands, the UK, Austria, Italy, West Asia, South American countries and North Africa, said the statement from ICEA.

“30% of production in FY’24 will now be meant for exports. The industry expects to end FY’24 with an estimated export of Rs 1.2 lakh crore. Driven by this export growth, mobile phones have now become India’s 5th largest export as an individual commodity,” pointed out ICEA.

The rise in exports has been an outcome of the sustained efforts over the past several years. The Centre came out with the Phased Manufacturing Programme in May 2017 to encourage production of handsets. It launched an ecosystem of large-scale manufacturing of handsets. In short, the result was the country turned from a land of a couple of handset factories in 2014 into one that is recognised as the second largest mobile phone producer in the planet.

The Production Linked Incentive scheme added thrust to the process of attracting manufacturers in the country. Popularly known as PLI schemes, these pack incentives between 3 and 5% of the incremental sales value for a predetermined period to eligible manufacturers. It has lured global contract manufacturing majors such as Wistron, Foxconn, Pegatron and Rising Star to quickly build production bases in India. The Koren chaebol Samsung has set up its second-largest mobile phone factory in Noida.

“This exponential growth in production, exports and self-sufficiency stems from a conducive policy environment, and a close working relationship between industry and key Government Ministries such as the Ministry of Electronics and IT, DPIIT, Ministry of Commerce, Ministry of Finance, NITI Aayog and the PMO,” ICEA said in its statement.

The country’s policymakers have dovetailed their objective of attracting handset manufacturers in the country with the strategy to wean away producers from China to turn India into an export hub and generate employment.