Jakarta, CNBC Indonesia – China is the world’s largest smartphone manufacturer. However, get ready to be overtaken by India.
Shipments of mobile phones manufactured in India have now exceeded 2 billion units cumulatively under the ‘Make in India’ initiative which was implemented during 2014-2022.
The gains recorded an annual growth rate of 23%, according to recent research from research firm Counterpoint.
Huge internal demand, increasing digital literacy, as well as encouragement from the government are the main reasons for the growth of India’s local production.
Now India is the second largest cellphone producing country, quoted from the Counterpoint report, Tuesday (15/8/2023).
The Government of India has introduced schemes and initiatives such as the Phased Manufacturing Program (PMP), Make in India, Production Linked Incentive (PLI) and Atma-Nirbhar Bharat (India Mandiri) to increase local manufacturing productivity.
“India has come a long way in mobile manufacturing. We have seen local manufacturing increase over the years to meet domestic demand,” said research director Tarun Pathak.
By 2022, over 98% of HP shipments in India as a whole will be ‘Made in India’, compared to just 19% when the government launched the program in 2014.
The report also looks at increasing local value added and supply chain development in India.
Local value addition in India today averages over 15%, compared to low single digits eight years ago.
Many companies are setting up units in the country to manufacture mobile phones as well as components, leading to investment growth, increased employment and development of the ecosystem as a whole.
The Indian government is currently making use of various schemes to make India a ‘semiconductor manufacturing and export hub’.
Going forward, production increases are predicted to continue, especially for the smartphone category. This is because India is preparing to bridge the urban-rural digital divide and also become a mobile phone exporting center.
Counterpoint Senior Analyst Prachir Singh, said India has launched and implemented many schemes, which have resulted in huge leaps in mobile manufacturing over the years.
Under the ‘Made in India’ programme, the government introduced the Phased Manufacturing Program and raised import duties on completed units and some key components over the years to encourage local manufacturing and value addition.
Under the Mandiri India scheme, the government introduced a Production Linked Incentive (PLI) scheme for 14 sectors, including mobile phone manufacturing.
“Because of all this, exports from India have increased. Going forward, the government is focused on making India a semiconductor hub. It has proposed a semiconductor PLI scheme and is now focusing more on infrastructure with a proposed investment of US$1.4 trillion,” he explained.
RI citizens are lazy to buy new cellphones, this type of smartphone doesn’t sell well