Make in India: Only half of country’s 268 cellphone makers stay afloat

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Updated: July 19, 2019 6:58:29 AM

In December 2018, the prime minister went with the first estimate and spoke of 120 mobile makers. In the Interim Budget on February 1, the finance minister used the 268 number, and said this was a big jump from just two units earlier.

Make in India, mobile maker, mobile phone manufacture, industry news, Registrar of Companies, MeitY did not comment on an FE query on how many units were engaged in the production of mobile phones.

The government has put out, on various occasions, very different numbers to show how successful the Make-in-India policy has been when it comes to mobile phone manufacturing locally. In its 2017-18 report, the ministry of electronics and information technology (MeitY) put it at 120 units making mobiles and components (59 were making only handsets); in February 2019, however, the National Policy on Electronics (NPE 2019) said there were 268 units for mobile handsets and components that had been set up in the last 3-4 years.

In December 2018, the prime minister went with the first estimate and spoke of 120 mobile makers. In the Interim Budget on February 1, the finance minister used the 268 number, and said this was a big jump from just two units earlier.

It turns out, as FE found, that of the 127 units that manufacture mobile phones (89 of them do so exclusively) in India, just around 41% are operational; the figure is 55% for the 65 units making battery packs (21 exclusively) and 58% for the 130 making chargers (85 exclusively).

MeitY did not comment on an FE query on how many units were engaged in the production of mobile phones. It is not clear what this does for either the number of people employed in this business or their production since the Bureau of Indian Standards (BIS) where all these production units are registered does not have such details.

According to NPE 2019, the production of mobile handsets rose from 60 million in 2014-15 to 225 million in 2017-18; and these units provided employment to 6.7 lakh persons directly and indirectly (see graphic). Fairly low levels of value addition, however, have meant that while imports of complete phones have fallen from $8bn in FY15 to $3.5bn in FY18, imports of mobile-specific components rose from $2.8bn to $11.6bn; imports of components seem to have fallen in FY19, but that is due to the import classification of some items changing.

In an RTI query, MeitY had given a list of 342 units, and this reduces to 268 when you remove any overlaps; 268 is the number NPE2019 used. There are 15 units that, for instance, are registered as producing both mobile phones and battery packs; ideally, they should be counted just once.

Though the BIS website doesn’t have data on production, it does have information on whether a unit is active or not. In addition, some checks were also made using the Registrar of Companies (RoC) database to get some more information.  In the case of Rising Stars Mobile India Private Limited which makes mobile phones, for instance, BIS data shows it had one unit in Maharashtra that made phones for InFocus, but its registration has lapsed. Its other two units in Andhra Pradesh make various models of phones for Lyf, Sony, Xiomi, etc. The RoC data says its turnover in 2015-16 was Rs 1,964 crore.

Flextronics which has a unit in Himachal Pradesh and two in Andhra Pradesh, the BIS database tells us, makes phones for Motorola, Lenovo, Micromax, Xiaomi and Honor. Samsung India, according to the BIS and RoC data, has just one factory, in Noida and had a turnover of `37,349 crore from the mobile phone business in 2017-18.

In the case of Datawind, which claimed to make the world’s cheapest tablet, Aakash, the BIS website says the registration, for its factory in Punjab, was cancelled with effect from November 1, 2017.

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