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All top positions in smartphone sales are occupied by foreign firms, including three Chinese ones. (Bloomberg)
All top positions in smartphone sales are occupied by foreign firms, including three Chinese ones. (Bloomberg)

Why China is key to India’s phone market

A recent EPW article says India has failed to use a public laboratory such as C-DOT to sustain innovation in the sector

The recent India-China military tension has turned the focus on the “Swadeshi" sentiment amid calls to boycott Chinese products. But the task is tough, because China’s imprint is everywhere in the Indian market—most popularly in the form of smartphones. What makes India so dependent in this key consumer goods sector?

A recent article in Economic and Political Weekly (EPW) blames policy failure, and says India’s inability to build innovation capacity at home has led to heavy reliance on China for the import of mobile phones and their parts. This has widened the trade deficit in the telecom equipment sector, says the article’s author, Sunil Mani of the Centre for Development Studies.

Using government data, the study notes domestic manufacturing of mobile phones rose 69% on average between 2013-14 and 2017-18, making India the second-largest mobile phone manufacturer after China. However, the leading manufacturers of mobile phones in India are all foreign companies, and ­domestic players are few.

All top positions in smartphone sales are occupied by foreign firms, including three Chinese ones. The few domestic manufacturers, such as Micromax, Karbonn, Lava and Spice have “virtually collapsed", Mani adds.

Domestic manufacturers do not hold a single patent for contemporary 4G and 5G technologies at the Indian patent office. Chinese and Western companies are involved in most of the 23,500 patent applications in India, the paper says.

India already has a state-funded laboratory for telecom—the Centre for Development of Telematics (C-DOT) —and strengthening it again is one way to change the situation. The author says that C-DOT, set up in 1985, has completely failed to adapt and innovate for mobile technology, leaving domestic manufacturers to become mere assemblers of imported parts.

India needs to invest in world-class research and development to innovate in mobile communication technology, Mani concludes.

Also read: Developing India’s Mobile Phone Manufacturing Industry

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