India launches scheme for Mobile manufacturing units to come to India

The government has announced the launch of three new schemes of Rs 50,000 crore with the aim of making India the world’s top country in mobile phone production. But it will not be easy to end Chinese dominance in mobile handsets and call the world’s top mobile companies.

What is the government’s plan

Announcing this, Information Technology and Communications Minister Ravi Shankar Prasad said on Tuesday that Make in India is not to leave any other country behind but to make India self-reliant. These schemes have been launched with an aim to speed up the production of electronic products and their parts along with mobile manufacturing.

Prasad said the three schemes are expected to employ about 10 lakh people in the next five years. It has set a target of manufacturing Rs 8 lakh crore and exports worth Rs 5.8 lakh crore. He said the Rs 40995 crore Product Linked Incentive (PLI) scheme aims to increase the production of mobile phones and electronic parts.

The ministry also wants to attract global mobile handset manufacturers in India and become a global manufacturing hub for mobile handsets.

According to statistics, a mobile manufacturing business in the country grew from $2.9 billion in 2014-15 to $24.3 billion in 2018-19. This means an annual growth of 70 per cent.

Top 5 Companies To Come To India

Prasad said that 80 percent of the mobile market in the world is occupied by only 5-6 companies and hence India intends to attract these 5 top global players here. In addition, five Indian companies are also planned to be promoted.

What the expert says

Experts say that the government’s plan is very good on paper, but it is not easy to implement. Also lacks clarity in many cases. “The eligibility condition lacks the definition of manufacturing and value editions, so a company can import 100 per cent of the component and claim the PLI,” said a telecom analyst.

Currently, 80 per cent of smartphone manufacturer in the country are assembling fully imported kits. Some companies in the mobile business make handsets themselves, some designing themselves and making it from someone else. Apple also makes handsets from other companies, Vistron, Foxconn and Pegatron. Apple’s device manufacturers are from Taiwan, but they also do their manufacturing work from Chinese factories because of cheaper costs. Similarly, companies like Oppo, Xiaomi, Vivo make their handsets from other companies like Wingtech, Longchier in China.

In China, these companies receive huge government support, which reduces their costs considerably. “You can’t expect Apple to suddenly leave China,” says Neil Shah, vice president (research) of Counterpoint Research. Device makers in China will have to think many times before moving to another country, as the government also has strict control over them. They can’t offend the Chinese government. The Government of India cannot give incentives to these companies on such a large scale, as China gives,” he said.