By Elton Gomes
The Indian handset manufacturing ecosystem has saved a total of Rs 3 lakh-crore over a period of four years for the country. The domestic manufacturing ecosystem has achieved this feat by replacing imports of completely-built units (CBUs) with mobile handsets that are locally assembled and manufactured, India Cellular & Electronics Association (ICEA) said. India has become the worlds second largest mobile phone producer after China.
“In 2017-18, over 225 million handsets were assembled/manufactured in India, which was roughly 80% of the total market requirement, the ICEA said in a report, as reported by the Economic Times. The ICEA predicted the local manufacturing of handsets could generate mobile phones collectively valued at Rs 1,65,000 crore by 2018-19. While for the same period the turnover could be 290 million handsets.
Impact on the Indian economy
The net foreign exchange savings have been predicted to be over Rs 60,000 crores. During the past four years, Indias mobile handset and components manufacturing industry has resulted in the establishment of over 120 new manufacturing units, thereby giving jobs to more than 4.5 lakh people, the report added.
As per the report, in the first two quarters, the total value of locally manufactured handsets will go above Rs 75,000 crore while handset turnover volume is estimated to be around 130 million units. Most global handset brands and manufacturers are eyeing India, which is the worlds fastest growing smartphone market, having overtaken US last year to become the worlds second largest smartphone market after China, ICEA chairman & national president, Pankaj Mohindroo, said in a statement.
Mohindroo added that imports of mobile phones will trickle down to insignificant levels of around five to seven per cent of the market (less than Rs. 1000 crore/month) by the end of 2018 financial year, IANS reported. The ICEA chairman further said that India is moving towards near zero imports for mobile phones in the coming years.
Booming production
Over the past few years, India has seen a massive boom in the number of mobile manufacturing units under Prime Minister Narendra Modis government. As per data from Hong Kong-based Counterpoint Research, in 2014, India had just two mobile-making units. That figure skyrocketed to 123 by the end of 2017. Such a meteoric rise can be attributed to several foreign phone makers entering the scene.
According to data shared by ICA, the annual production of mobile phones in India increased from 3 million units in 2014 to 11 million units in 2017. India replaced Vietnam and became the second largest producer of mobile phones in 2017.
In the fiscal year 2019-20, the size of the domestic mobile manufacturing industry is expected to be Rs 1.35 lakh crore compared to Rs 94,000 in 2016-17, a study said. Citing a report titled Indian Mobile Phone market: Emerging Opportunities for Fulfilling Indias Digital Economy Dream, Business Line reported that two out of three mobile phones sold in India in 2016 were produced domestically. The report said that by 2020, almost 96% of mobile phones sold in India will be domestically manufactured. The report said, Local manufacturing value addition of more than 25% can be achieved for smartphones by 2019, translating into Rs 31,000 crore of local component sourcing and local assembly.”
Elton Gomes is a staff writer at Qrius