In a bid to strengthen its position in the global electronics value chain, India is setting its sights on a significant increase in local value addition in phone manufacturing. S Krishnan, Secretary at the Ministry of Electronics and Information Technology (MeitY), emphasized the importance of raising the current local value addition of 10-15 percent to a more competitive 35-40 percent.
Speaking at the Global Tech Summit 2023 organized by Carnegie, Krishnan highlighted the necessity of India being competitive in the component manufacturing industry to retain a substantial portion of the manufacturing pie. He stressed that global value chains are a blend of security interests and basic economics, and while no single country can monopolize an entire supply chain, resilience in the supply chain is crucial.
India’s ambitious goal is to produce $300 billion in electronics products by 2025-26, backed by generous incentives through its production-linked incentive (PLI) schemes. Mobile phone shipments under the ‘Make in India’ initiative reached a significant milestone, surpassing 2 billion units in 2022, with an impressive Compound Annual Growth Rate (CAGR) of 23 percent over nine years.
The ‘Make in India’ initiative saw over 98 percent of shipments in the overall market being domestically manufactured in 2022, a remarkable increase from just 19 percent in 2014. The local value addition in India currently averages more than 15 percent, a substantial improvement from the low single digits eight years ago.
The government reported that over 99 percent of mobile phones used in India are now manufactured locally, contributing to the mobile manufacturing industry’s value crossing $44 billion. Apple and Google have also played pivotal roles in this growth. Apple has aggressively increased local production of iPhones in India, aiming to surpass $40 billion in the next 4-5 years. Google recently announced plans to manufacture its Pixel smartphones in India, further bolstering the country’s aspirations of becoming a global manufacturing hub.
