- India is currently the world’s second-largest smartphone market, with 152.5 million units shipped in 2019, according to IDC
- Global and Indian companies that have applied for PLI scheme will produce goods worth 11.5 crore over five years
- The scheme also extends an incentive of 4% to 6% on incremental sales of goods manufactured in India under the targeted segments
It has been reported that smartphone makers in India are witnessing a rising interest from global firms and partnerships to produce phones and key components in India.
This emerges despite the border tensions between India and China, and the Modi’s administration call for self-reliance in the production of mobile phones and electronic parts. This government had also announced in June a production linked incentive (PLI) scheme for firms to promote electronics and manufacturing.
India to be a global manufacturers
Atul Lall, CEO of Dixon Technologies shared that they are looking at a very big opportunity and are already in talks with large global players for servicing not only the domestic markets but also export markets. Dixon Technolgies are the owners of Padget Electronics among the other domestic manufacturers that have applied for the 41,000 crore PLI that has a goal to make India a global manufacturer hub for smartphones.
India is currently the world’s second-largest smartphone market, with 152.5 million units shipped in 2019, according to IDC. According to government estimates, global and Indian companies that have applied for PLI scheme will produce goods worth 11.5 crore over five years. They would export about half of the production.
The scheme also extends an incentive of 4% to 6% on incremental sales of goods manufactured in India under the targeted segments. Smartphone makers have already started investing in expanding capacities and their manufacturing capabilities to move beyond just assembling phones to a more ‘design-led’ manufacturing approach that includes software and hardware design, and product aesthetics.
On the other hand, Shailendra Nath Rai, co-founder of the Lava brand also shared “We also have to extend our service to the electronics manufacturing sector (EMS). And that’s the reason why we’re investing in Sojo as well for EMS.” Lava and its unit, Sojo Manufacturing Services have also applied for the PLI scheme. EMS includes the manufacturing of display panels, camera modules, silicon wafers and other parts.
Lava plans to produce as many as 100 million smartphones annually in the next few years, while Dixon’s Lall shared that the company will be able to make almost 70 to 80 million smartphones per year soon.
Hence, in order to attract big mobile phone vendors to India, the country needs to ramp up its manufacturing capacity, Rai said, adding that Lava is already investing in building Sojo’s capacities to meet future requirements.