Will India's bet on mobile handset mfg pay off?

New Delhi: With a three-pronged strategy (restart, restore and resurgence), India can achieve $100 billion in mobile phones and nearly $40 billion in component exports by 2025, a new report said on Thursday.

The strategy document titled "Mobile Manufacturing in a post- Covid -19 World" by industry body India Cellular and Electronics Association (ICEA) and consultancy major EY, offers a roadmap for the Indian industry to become a global supplier of mobile phones in a world where two countries - China and Vietnam -- and five global companies dominate over 80 per cent of the world's export market.

Nearly 198 countries import mobile phones, and till recently, only two countries - China and Vietnam - were among the exporters. India joined the ranks as a third with a modest $3 billion exports in 2019-20. It now aims to target the number two spot.

"The mobile manufacturing and components sector is ready to lead India's post Covid-19 exit strategy. Production has restarted. We hope to hit 100 per cent production by August," Pankaj Mohindroo, Chairman, ICEA, told reporters in a video call.

India earlier this month launched three major schemes to boost manufacture of electronics in the country -- Production Linked Incentive Scheme (PLI) for large-scale electronics manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.

The three schemes would entail an outlay of about Rs 50,000 crore. "As the PLI scheme kicks in, we plan to ramp up global exports from India. There isn't a moment left to waste," Mohindroo added.

He said that the Indian mobile phone manufacturing industry is moving forward harmoniously. "There is no such thing as a domestic lobby and an international lobby here. We cannot work only on the supposedly big Indian market.

We will have to export," he said, adding that in the next four to five years the big global companies will be manufacturing in India for their global exports.

ICEA represents mobile and component manufacturers such as Apple, Motorola, Xiaomi, Nokia, Foxconn, Wistron, Flextronics, Lava, Vivo and others.

The plan prepared by ICEA and EY which aims at transforming mobile manufacturing and components into India's largest export within the next 3-4 years, aligns closely with the government's National Policy on Electronics (NPE-2019).

"The introduction of the incentive schemes like PLI, SPECS and EMC will bring resurgence in the manufacturing environment and create a competitive global ecosystem for India to capture the global market share of mobile phones, parts and accessories," said Bipin Sapra, Indirect Tax Partner Telecom sector, EY India.