NEW DELHI: The mobile manufacturing industry in India is targeting $100 billion in mobile phones exports by 2025. The industry also wants to export components worth $40 billion during the period, and this is all part of its “Restart, Restore and Resurgence" plan unveiled by the India Cellular and Electronics Association (ICEA) on Thursday.
“The mobile manufacturing and components sector is ready to lead India's post covid-19 exit strategy," said Pankaj Mohindroo, chairman, ICEA. He also said that production has started in India with the easing of the lockdown and the industry hopes to achieve 100% capacity by August.
The report, also submitted to the government, presents a plan to transform India’s mobile manufacturing sector over the next few years. "Mobile phones, and electronics in general, are the largest imported categories in the world," said the report. "The size of the global smartphone market was estimated at $495 billion in FY2018 and is expected to reach $647 billion."
The targets set in the report are aligned with the government’s National Policy on Electronics 2019 (NPE 2019). It makes note of the recent schemes for electronics manufacturing announced by the Ministry of Electronics and Information Technology (MeitY), and expects them to help the industry grow.
According to the report, for India to become a global player in the mobile manufacturing sector, it will need global market access, ability to attract large scale global value chain (GVC) investments, labour arbitrage, global brand presence, technology, low cost of inputs, domestic ecosystem and competitiveness.
"While global lead firms have made initial investments, their operations have been limited to assembly operations so far," the report said. “In order to attract and encourage investments to boost manufacturing and exports, global lead firms must be incentivized by India. This becomes more peculiar at a time when the domestic market is expected to saturate by growing roughly 3x by 2025 via-a-vis the market of 2018," says the report.
Further, according to the report, Apple, Samsung, Huawei, Oppo and Vivo accounted for 83% of the total market revenues from handset supplies in 2018. "Most major global brands already have presence in India but not all are focused on exports. Moreover, India constitutes a relatively small percentage of their global volumes," the report noted.
The industry also noted global pandemic has driven firms to consider moving their manufacturing bases from China. "Renowned manufacturers such as Wistron, Foxconn and Pegatron are mulling diversification/increase of production facilities outside of China."
Despite advantages of cheap and skilled labour, and a large domestic market, other South-East Asian peers like Vietnam, Malaysia, Thailand and Indonesia may compete "fiercely" with India for seeking investments in their respective countries.
While India has notified schemes that are World Trade Organization (WTO) compliant, ICEA’s report says their success will depend on “smooth, timely implementation and a disbursement process that is efficient and without delay".