India has made remarkable strides in mobile phone manufacturing, now assembling approximately 99% of its phones domestically. This transformation, driven by the "Make in India" initiative, has propelled the country to become the world's second-largest mobile phone producer, a significant leap from relying heavily on imports just a decade ago. However, this achievement marks not an end, but rather a transition to a new set of challenges as India strives to deepen its manufacturing capabilities and compete on a global scale.
The journey so far has been impressive. In 2014, India had a mere two mobile manufacturing units; today, that number has surged to over 300. The value of mobile phone manufacturing has skyrocketed from ₹18,900 crore in FY14 to ₹4,22,000 crore in FY24. Mobile phone exports have also witnessed exponential growth, surpassing ₹1,29,000 crore in 2024, a stark contrast to near-zero exports in 2014. This growth has generated approximately 1.2 million direct and indirect jobs, contributing significantly to economic development. Government initiatives like the Phased Manufacturing Programme (PMP) and the Production Linked Incentive (PLI) scheme have been instrumental in attracting global players and boosting local production.
Despite these accomplishments, India's mobile manufacturing sector faces significant hurdles in its quest to become a true global powerhouse. One major challenge is the underutilization of existing capacity. Reports indicate that nearly half of the country's mobile phone production capacity remains idle due to weak domestic and global demand. While key manufacturers like Foxconn, Samsung Electronics, and Tata Electronics continue to expand, smaller manufacturers struggle to compete, and are shifting to other products.
Another critical area needing attention is the development of a robust supply chain ecosystem. Currently, India relies heavily on imports for crucial components like display screens, cameras, batteries, and printed circuit boards. This dependence increases production costs and exposes the sector to vulnerabilities in the global supply chain. While the government has taken steps to reduce import duties on certain components, further measures are needed to incentivize local component manufacturing and reduce reliance on foreign suppliers.
Furthermore, regulatory and trade-related issues pose additional challenges. Concerns have been raised about the unpredictability in the ease of doing business, attributed to actions by enforcement agencies. India's limited participation in free trade agreements (FTAs) also hinders its ability to become a major export hub. To achieve its ambitious goals, India needs to foster a more transparent and business-friendly environment, while also actively pursuing FTAs to enhance its competitiveness in the global market.
Looking ahead, India's mobile manufacturing sector holds immense potential. The anticipated surge in global demand for smartphones and advanced technologies in 2025 presents a significant opportunity for manufacturers to scale up operations and improve capacity utilization. The shift towards 5G-enabled devices, IoT, and AI-powered technologies will further drive demand for advanced smartphones, creating new avenues for growth. By addressing the existing challenges and capitalizing on these emerging opportunities, India can solidify its position as a global manufacturing hub and achieve its goal of becoming a top smartphone exporter.
