While Narendra Modi-government’s ambitious ‘Make in India’ initiative, aimed at making India the global manufacturing hub, has made an impressive progress, Indian mobile phone makers are now seeking a paradigm shift to move far beyond — ‘Make in India for Global’. Buoyed by the growing demand for mobile devices on domestic turf, the mobile handset companies in India now want to tap the global markets by shifting focus to exports of the home-made phones.
To fuel further growth, the mobile handset companies are now seeking a 10-year tax holiday and reforms to focus on exports that can enable them to grow by over eleven-fold to $230 billion by 2025, a joint report by Indian Cellular and Electronics Association (ICEA) and McKinsey, that has been submitted to the government, showed.
The recommendations by the mobile handset companies also include reduction of various duties, greater flexibility in working hours, relaxing retrenchment of labour and closing of establishments rules, among others.
There is a potential to manufacture 1,250 million (125 crore) handsets by the end of 2025, the report said. This would also lead to providing an employment to about 47 lakh people across the country in assembly, programming, testing in packaging (APIP) operations in the process, it added
It may be noted that approximately 120 manufacturing units in the mobile manufacturing segment have come up since 2014 on the back of strong domestic market demand and with the support of government policy.
In the last year 2017, a total of 225 million mobile handsets worth $20 billion were manufactured in 2017, with exports of around $100 million, the report showed.
India’s mobile manufacturing industry currently produces primarily for the domestic market. If it continues to manufacture mobile handsets and components only for itself, it would be likely to produce only about 450 million handsets as compared with 1,250 million and employ just 80 lakh people for an industry worth nearly $80 billion by 2025.
The companies have recommended to brings changes to the current policies on taxes, labour laws and e-waste for orientation of the industry towards the global markets and to attract core manufacturing processes of global brands. Just in the Apple supplier eco-system, the top 15 component suppliers in China earned over $80 billion in annual revenues in 2016 alone, on investment of about $96 billion since 2007, the report showed.