Ever wondered who makes the mobile you are using? Chances are that it has been made in India.
The country today is one of the leading producers of mobile phones globally. As per a quick estimate for selected major commodities for March 2023, electronic exports have become the sixth largest export commodity group.
Now consider the fact that India has almost 120 crore mobile connections. A major chunk of handsets are smartphones. The demand for mobile connections started growing through the first decade of the new millennium. With per-GB data charges dropping to as low as Rs. 10, usage multiplied in 2016.
Big decline in imports
India accounts for 30 million smartphone purchases every quarter. And most of this demand is being met internally, resulting in a sharp decline in the import of mobile phones. While imports were worth some Rs 3,100 crore in the first quarter of FY21, they dropped to Rs 600 crore in the corresponding period of FY22.
In fact, India became the world’s fastest-growing market for mobile applications during the first quarter of 2018. Imports of mobile phones decreased from $3.5 billion in 2017- 18 to $0.5 billion in 2021 (April 21-September 21).
Mobile phone production has risen from about six crore in 2014-15 to approximately 32 crore in 2021-22.
Exports increase
Meanwhile, export of mobile handsets from India increased from over Rs. 1,566 crore in FY 2014-15 to Rs. 35,696 crore in FY 2021-22. The value of export of mobile phones in FY 2022-23 (till Jan 2023) stood at Rs. 68,605 crore, which has approximately doubled as compared to the same period of the preceding year.
Overall, exports of electronic goods have increased from Rs. 39,978 crore in 2016-17 to Rs. 109,797 crore in 2021-22, exhibiting a Compound Annual Growth Rate (CAGR) of 22.39 per cent.
As per industry estimates, India’s share in global electronics manufacturing has grown from 1.3 per cent in 2012 to 3.75 per cent in FY 21-22.
Government initiatives
Several steps were initiated to increase domestic manufacturing and export of electronics goods, including mobile phones. These include Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, Production Linked Incentive Scheme (PLI) for IT hardware, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), Modified Electronics Manufacturing Clusters (EMC 2.0) under the National Policy on Electronics, 2019, which envisages positioning India as a global hub for Electronics, System Design and Manufacturing (ESDM).
Doors have been opened for Foreign Direct Investment of up to 100 per cent under the automatic route for electronics manufacturing (subject to applicable laws).
Five-year roadmap
Earlier, the Ministry of Electronics and Information Technology (MeitY), in association with India Cellular and Electronics Association (ICEA), released a five-year roadmap for the electronics sector. Titled ‘$300 bn Sustainable Electronics Manufacturing & Exports by 2026’, the roadmap was the second volume of a two-part vision document, ‘Increasing India’s Electronics Exports and Share in GVCs’.
It provides a year-wise break-up and production projections for the various products that will transform India into a $300 billion electronics manufacturing powerhouse from the current $75 billion.
Among essential products that are expected to lead India’s growth in electronics manufacturing include mobile phones, IT hardware (laptops, tablets), consumer electronics (TV and audio), industrial electronics, auto electronics, electronic components, LED lighting, strategic electronics, PCBA, wearables and hearables, and certain telecom equipment.
Mobile manufacturing is expected to cross $100 billion annual production and constitute nearly 40 per cent of this ambitious growth.
