India Now 2nd Largest Mobile Manufacturing Nation!
The Indian government announced the Phased Manufacturing Programme (PMP) in May 2017 to promote the domestic production of mobile handsets. This initiative has helped build a robust indigenous mobile manufacturing ecosystem in India and incentivized large-scale manufacturing. As a result, India has now become the second-largest mobile phone producer in the world.
According to a report by the India Cellular and Electronics Association (ICEA), mobile phone manufacturing in value terms has jumped 21-fold to Rs. 4.1 lakh crore in India over the last decade, with government policy measures such as the PLI scheme playing a critical role in attracting global players to boost local production. The statement by the India Cellular and Electronics Association (ICEA) also highlighted that India now produces 97% of its total mobile phone demand locally and 30% of the total production in the financial year 2024 is allocated for export.
According to the India Cellular and Electronics Association (ICEA), mobile phone production in India has experienced a surge from Rs. 18,900 crore in 2014-15 to an estimated Rs. 4,10,000 crore in FY24, which marks a remarkable increase of 2,000%. However, mobile phone exports from India were a mere Rs. 1,556 crore in 2014-15. Now the industry expects to end FY24 with an estimated export of Rs. 1,20,000 crore, which would mean a 7,500% increase in exports over a decade.
According to a note on manufacturing, Apple and Samsung have played a crucial role in boosting mobile phone exports from India, particularly in the field of smartphones. The note also stated that devices manufactured in India are exported to various countries such as the United Kingdom, the Netherlands, Austria, and Italy. Additionally, these devices are exported to markets in West Asia, North Africa, and South America.
As per the statement by India Cellular and Electronics Association (ICEA), 30% of the total mobile phone production in the financial year 2024 is expected to be exported, with the industry anticipating an estimated export of Rs. 1.2 lakh crore by the end of FY24. The statement also highlighted that mobile phones have now become India’s fifth-largest export as an individual commodity, driven by this export growth.
Understanding How PLI Initiative Boosts Mobile Manufacturing
The Production Linked Incentive (PLI) scheme is a performance-linked incentive introduced by the Government of India with the primary goal of boosting the manufacturing sector and reducing imports. It is an initiative started by the Government of India to encourage foreign companies to find a workforce in the country and thereby generate employment, as well as encourage domestic and local production to create jobs.
Purpose: The PLI scheme aims to provide incentives to companies based on incremental sales from products manufactured within domestic units.
Sectors Covered: The scheme covers various sectors, including automobiles, electronics, pharmaceuticals, telecom, food processing, textiles, and more.
Financial Incentives: Companies receive financial incentives for increased production and sales of domestically manufactured goods. These incentives are designed to encourage investment and promote industrial growth.
Duration: The PLI scheme typically operates for a specified period, during which companies can benefit from the incentives. The duration varies depending on the sector and government policies.
Specific Sectors:
Automobile and Auto Components: The scheme aims to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive value chain.
Electronics: The PLI scheme incentivizes domestic electronics hardware manufacturing and encourages investments in mobile phones and electronic components.
Pharmaceuticals: It promotes the production of key starting materials, drug intermediates, and active pharmaceutical ingredients.
Other Sectors: The PLI scheme also covers areas like telecom, food products, textiles, drones, and more.
Beneficiaries: The PLI scheme benefits both large companies and micro, small, and medium enterprises (MSMEs).
