Mobile phone manufacturing in India

India has emerged as the 2nd largest mobile phone manufacturer only after China. As per the current rate of growth, India would soon replace China to be the top manufacturer of mobile phone devices. According to Indian Cellular Association (ICA), the annual production of mobile devices and accessories has increased from 3 million in 2014 to 11 million devices in 2017 which accounts for 11% of production globally. Telecom industry is also one of the top 5 sectors of employment generation in India. 

During the first quarter of 2018, India became the world’s fastest growing market for mobile application. The most promising initiative by government turned out to be Phased Manufacturing Programme (PMP) under Ministry of Commerce and Information Technology. PMP focused on development of indigenous market and promotion of domestic production of mobile communication devices. This initiative is helping in building a robust indigenous mobile manufacturing ecosystem and also in incentivizing large scale manufacturing. 

The introduction of smart phones has lead to significant growth in Indian mobile phone market over the past decade. In 2017, India surpassed USA to be the 2nd holder in cell phone production. Statistics by CISCO suggest that, by 2021 there will be 780 million connected smartphones in comparison to 356 million in 2016. India has turned out to be the huge market for smartphone makers. Various initiatives by GOI like ‘Make in India’ have lead to set up of manufacturing plants by renowned names. OnePlus the premium mobile phones manufacturer have claimed to set up its R&D facility in Hyderabad. Samsung Electronics has setup its largest mobile phone factory in Noida, which will nearly double its installed capacity to manufacture 68 million phones to 120 million. The company’s initiative of “Make for the World” shall make India as the hub for exporting to overseas market. Additionally, these initiatives promote job creation and investment which boosts the economy. 

India is a price sensitive market which has prompted various companies to introduced budget phones. From local manufacturers like Karbonn, Micromax to big players like Samsung and Xiaomi, budget phones have flooded the market. The changing preference of customers and highly competitive market is pushing the manufacturers to introduce phones with enhanced features. 

The mobile phone manufacturing sector is expected to reach an investment of USD 200 billion by 2020. With the growing mobile phone penetration and cheaper mobile data available, the market experience surge in customers every year. All the factors taken in account are expected to keep the market on upward curve as it will increase foreign investment and job prospectus. 

 

Shalini Singh 

PGDM Batch 2019-2021

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