India Emerges as Global Mobile Manufacturing Hub: From Importer to Exporter in a Decade

India’s mobile phone industry has undergone a transformative journey over the past decade, evolving from a net importer to a global manufacturing powerhouse. This significant shift not only bolsters the nation’s economy but also positions India as a key player in the global electronics market.

In the fiscal year 2014-15, mobile phone production in India was valued at a modest ₹18,900 crore. Fast forward to 2023-24, and this figure is expected to escalate to an impressive ₹4.10 lakh crore. This exponential growth underscores the country’s escalating manufacturing capabilities and its commitment to becoming self-reliant in the electronics sector.

A pivotal aspect of this growth story is the surge in exports. In 2014-15, mobile phone exports stood at a mere ₹1,556 crore. According to data from the Indian Cellular and Electronics Association (ICEA), the last decade has seen mobile exports worth ₹3.22 lakh crore, with the year 2023-24 alone touching the ₹1,20,000 crore mark—marking an astounding 77-fold increase. This leap not only enhances India’s trade balance but also cements its reputation as a reliable exporter of high-quality mobile devices.

Conversely, imports have witnessed a dramatic decline. In 2014-15, India imported mobile phones worth ₹48,609 crore. By 2023-24, this number is expected to plummet to ₹7,665 crore, an 84% reduction. This shift signifies the country’s reduced dependency on foreign manufacturers and the success of initiatives promoting local production.

In 2014-15, a staggering 74% of all mobile phones in India were imported. Today, that narrative has changed remarkably. Now, over 99% of mobile phones used in India are ‘Made in India,’ highlighting the nation’s journey towards self-sufficiency.

Since 2014, India has produced an impressive 2.5 billion mobile handsets worth ₹20 lakh crore. The number of manufacturing units has surged from just a handful in 2014 to over 200 units, making India the second-largest mobile phone manufacturing nation globally. With an annual production rate of 325 to 330 million mobile phones, the country is now the world’s fastest-growing market for mobile phone production.

Government initiatives have played a crucial role in this transformation. The Phased Manufacturing Programme (PMP), launched in 2017, was the first significant step towards indigenizing mobile phone production. The PMP aimed to incentivize large-scale manufacturing by progressively increasing import duties on components, thus encouraging local assembly and production.

Building on this momentum, the 2021-22 Union Budget introduced the Production Linked Incentive (PLI) scheme for Large-Scale Electronics Manufacturing (LSEM) and IT hardware. This scheme offers incentives ranging from 3% to 5% on incremental sales value, effectively attracting global manufacturing giants like Foxconn, Pegatron, Rising Star, and Wistron to establish bases in India.

One of the crown jewels of India’s manufacturing landscape is Samsung’s largest mobile phone production factory, located in Noida. This facility underscores India’s appeal as a manufacturing hub and its ability to host large-scale operations for global companies.

The industry’s growth has also had a profound impact on employment. Between 2023 and 2028, the mobile phone manufacturing sector is expected to generate 8 lakh new jobs, providing a significant boost to the country’s employment rates. The Government of India projects that the sector will be worth $126 billion or Rs 10,587.82 billion by 2025-26.

Furthermore, India is set to become the second-largest 5G market after China by 2024, surpassing the United States. This advancement aligns with a February 2022 report by Deloitte, which predicts that India will have one billion smartphone users in the near future.

The ripple effect of the mobile phone industry’s growth is evident in the broader electronics sector. Mobile phone production now accounts for 43% of total electronics production in India. The electronics sector’s production value has more than doubled from $48 billion or Rs 4033.46 billion in FY17 to $101 billion or Rs 8487 billion in FY23, employing over 1.2 million people, according to government data. The growth is driven primarily by increased mobile phone production.

This remarkable journey from being a major importer to a leading exporter and manufacturer highlights India’s strategic initiatives and the robust potential of its manufacturing sector. As the nation continues on this trajectory, it solidifies its position as a global electronics hub, contributing significantly to economic growth and technological advancement.

By – Santosh Chaubey