How India Plans to Challenge China’s Dominance in the Mobile Phone Industry

Published on January 26, 2023

Deepa Aswani was on a quest to locate a phone that fit her budget and her preferences. As an employee in the marketing department in Mumbai, found the task of purchasing a new smartphone to be quite a challenge.

She expresses that she is particular about her phone purchase and unwilling to invest significantly.

After two months of contemplation, the OnePlus 10R was her ultimate selection. It only cost her $400 (£329), which is a reasonable amount for a smartphone, yet still substantial in any nation, especially a developing one such as India.

She expresses her satisfaction with the phone she purchased, which she found affordable and with good features.

A Chinese enterprise based in India produced Ms Aswani’s new phone, which is quite a typical occurrence today.

In 2014, most of the phones sold in India originated from other countries.

In the past few years, the scenario has transformed; ICEA states that in 2022, nearly every mobile phone sold in India was also manufactured there.

Many cellular devices were produced by foreign companies with factories in India, such as Foxconn from Taiwan and Samsung from South Korea. Rapid growth of domestically-owned companies is being seen in these nations.

Micromax Informatics is an ambitious competitor in the mobile handset market, having entered in 2008. Within two years, they had already made a name for themselves in India, becoming a leading producer of low-priced phones, otherwise referred to as feature phones.

Micromax has become one of India’s biggest makers of mobile phones. Credit: Micromax

Rajesh Agarwal, one of the co-founders of Micromax, affirms that it is challenging to vie with Chinese smartphone creators despite their growth.

His company’s launch of a new phone may bring about a million sales in India. However, Chinese phone makers can sell 10 million devices or more, resulting in a great cost advantage for them. 

He remarks that their production capabilities are formidable. Chinese companies can acquire almost all of the parts they need from within the country.

Parts like chargers, cables, and batteries can be produced in India, however, items such as screens and computer chips are almost exclusively manufactured outside of the country.

According to Rajesh Agarwal, the co-founder of Micromax, India must produce the various elements used to construct a phone.

Micromax co-founder Rajesh Agarwal says India needs to make all the components that go into a phone. Credit: Micromax

Mr. Agarwal expressed that the manufacturing process is just starting and to be successful, they must become a space where all the parts are produced within their own facility.

He states that the aim is to move away from creating goods for domestic use to providing goods for a global market, not just for telephones but for computers, tablets, and other electronic products.

The authorities in India are attempting to hasten the transition.

In April 2021, the Indian government rolled out the Production Linked Incentive (PLI) Scheme to provide incentives for Telecom and Networking Equipment production.

The government has been working towards increasing manufacturing in India for several years, which is the most recent action in pursuing that aim.

The Government’s Production Linked Incentive (PLI) program is providing financial aid to manufacturers of mobile phone components in India to increase their competitiveness and output.

ICEA has indicated that roughly 15-20% of the components used to construct an Indian cell phone are produced in India.

Image: Micromax

The PLI scheme is set to increase the percentage of manufacturing from 35% to 40%.

Currently, just a fifth of the components used for Indian phones is manufactured in India.

Pankaj Mohindroo, the chair of ICEA, has stated that the production-linked incentive scheme has been a revolutionary development for electronics manufacturing.

He suggests that India is on its way to becoming a major producer of mobile handsets and has already achieved the rank of the world’s second-greatest manufacturer of such devices.

The India Electronics and Cellular Association has predicted that mobile phones will be the primary driver of India’s electronic exports for the upcoming year, accounting for about half of the total.

Hari Om Rai, chairman of Lava International, forecasts India will become a significant center for cell phone production.

He stresses that as China has become wealthier with wages growing, it has lost some of its competitive advantages compared to other countries.

Furthermore, Mr. Rai expresses that companies all across the globe are concerned about having too much dependence on Chinese-made products.

Anxiety about Apple’s main supplier in Zhengzhou is unlikely to have been relieved by the disruption there.

Mr. Om Rai states that India is desirable for companies looking to relocate their manufacturing operations.

The speaker emphasizes that India holds 18% of the global population yet only 3.1% of the GDP. With an increasing GDP, the nation will likely become a leading market. Due to this long-term potential, many companies strive to establish a presence and gain an advantage over their rivals in India.

Deepa Aswani, in Mumbai, is not particularly intrigued by the industrial policy.

She expresses that where her smartphone is produced does not matter to her. What counts more for customers is the cost and specifications. As a phone buyer, she would consider the nation with progressive technology and a reasonable price.

The evidence strongly suggests a correlation between the amount of time individuals spend on their phones and their overall stress levels. Using their phones too frequently can lead to elevated levels of worry, with many people becoming increasingly stressed when they cannot access or use their devices.

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