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How to make 1 billion mobiles: Strategy to make India a cell phone manufacturing hub

FE Online

While the Indian government targets ramping up mobile phone and component manufacturing in the country according to its National Policy for Electronics, India needs to adopt a multi-prong approach and manufacture 1 billion mobiles a year, a report said. “India must ensure that the scale of manufacturing increases manifold,” to achieve export revenue of $200 billion, Internet and Mobile Association of India (IAMAI)’s report titled ‘Make in India 2.0 (Revisiting Mobile Manufacturing) said. The global handset market is worth about $467 billion and it is largely catered by Asian countries such as China, Vietnam, South Korea and Taiwan, the report added.

“India has a huge potential of becoming a manufacturing hub. The new NEP is export-oriented and mobile device manufacturing will be the largest segment accounting for a third of the size of the manufacturing sector,” Amitabh Kant, CEO, Niti Aayog said while releasing the report. He added that the government is bolstering itself to become a global manufacturing country for all electronic sector of India. 

The report also lays out the strategy to make India a manufacturing hub. Firstly, the focus is needed on attracting large-scale manufacturing and enhance local value integration. Secondly, India needs to proactively capture the market for high-end smartphones which is currently served by other countries. The country would also require attracting large brands to invest locally in order to improve forward and backward integration with mobile phone GVCs, said the report. This will also help with the component suppliers as they tend to follow leading brands. Indian government must also look into incentivizing exports to promote domestic manufacturing. Also, production-based incentives should be given. 

While India has become a domestic market serving country after import substitution approach, the country needs to become “manufacturing and export hub" globally in order to grab a larger pie of the world’s smartphone market, the report said.