India aims for 40% local value addition in phone manufacturing to boost global competitiveness

  • Industry News
  • Dec 06,23
S Krishnan, Secretary at the Ministry of Electronics and Information Technology (MeitY), outlined this goal during the Global Tech Summit 2023 organised by Carnegie on December 5.
India aims for 40% local value addition in phone manufacturing to boost global competitiveness

A senior government official emphasised the need for India to enhance its domestic value addition in phone manufacturing from the current 10-15 per cent to a range of 35-40 percent. S Krishnan, Secretary at the Ministry of Electronics and Information Technology (MeitY), outlined this goal during the Global Tech Summit 2023 organised by Carnegie on December 5.

Krishnan highlighted the importance of competitiveness in the component manufacturing industry for India to retain a significant share of the manufacturing sector. He acknowledged the global reality that no single country can completely dominate the entire supply chain, citing China's 40-45 per cent share in the electronics value chain.

Discussing India's ambitions, Krishnan mentioned the country's target of achieving $300 billion in electronics production by 2025-26. To attract device manufacturers looking to diversify from China, India has implemented production-linked incentive (PLI) schemes, providing generous incentives.

Under the 'Make in India' initiative, mobile phone shipments exceeded 2 billion units in 2022, with an impressive Compound Annual Growth Rate (CAGR) of 23 per cent over nine years. Krishnan highlighted the significant increase in local value addition, reaching over 15 per cent, compared to low single digits eight years ago. He noted that more than 99 per cent of mobile phones used in India are now manufactured locally, contributing to a mobile manufacturing industry valued at over $44 billion.

Apple and Google have played a notable role in India's manufacturing landscape. Apple has intensified local production of its flagship iPhone devices, aiming to surpass $40 billion in production in the next 4-5 years. Google has also announced plans to manufacture Pixel smartphones in India, starting with Pixel 8 and Pixel 8 Pro, with the first devices expected to roll out in 2024 through collaboration with domestic and international manufacturers. These developments align with India's vision of becoming a global manufacturing hub.

Source: Moneycontrol

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