The Growth of Mobile Phone Manufacturing in India
India is the second-biggest mobile phone manufacturing country globally. In the year 2014-2015, the demand for phones was met by imports to the extent of about 75 percent. However, this reduced to only 0.02 percent in the last year. Moreover, the country witnessed an increase in the export of smartphones from ₹1,500 crores to ₹2 lakh crores during this time. As of now, the country exports a total of 330 million mobile phones each year.
The sector of electronics manufacturers has been attracting foreign direct investment worth approximately $4 billion in the period from 2020-21. It is an important part of the ‘Make in India’ initiative. The main factors responsible for this growth in this sector are improvements in infrastructure as well as policies, alongside schemes to promote the production of smartphones.
Imports to Large Scale Exports
- There has been improvement in the business environment in India. This is because the country has been ranked lower in the Ease of Doing Business index, moving from rank 142 in 2014 to rank 63 in 2019. This is a result of government initiatives including Make in India, Digital India, Skill India, the Phased Manufacturing Programme, National Electronics Policy, and the Production Linked Incentive Scheme.
- On the other hand, advantages for India include its large number of consumers, high demand for high-end smartphones, lower labor costs, and talent pool of engineers. Due to these advantages, Apple, Samsung, and other Chinese manufacturers started their production units in India.
- In the initial five months of the ongoing financial year, smartphone exports had reached above ₹1 trillion. The overall smartphone market in the country had expanded by five percent during the third quarter. The smartphones, ranked 167 in exports from India in 2015, advanced to the third position in the last year.
Assembly as opposed to Full Manufacturing
- The trade war between the US and China forced Apple to look at other options outside of China. In India, Tata Group and Foxconn are significant in the assembly of Apple products. Almost 50 suppliers of Apple components operate in India. Apple has tied up with 45 companies in India. Out of these, half of them are MSSEs.
- In spite of all this, India today primarily concentrates on assembling. Higher-end components, such as semiconductors, are mostly imported. To further move up the value chain, it would require increased R&D spending, innovation, as well as more sophisticated manufacturing facilities.
The Integration of Apple’s iPhone Production Lines in India
- In the second quarter of the current year, 44 percent of the smartphones that were imported into the US were from India. Within the first half of the current year, there was the export of $10 billion worth of iPhones by Apple to India. It is predicted that by the end of this year, India could manufacture 25 percent of the iPhones.
- Apple plans to meet 30 percent of its component demand from India before 2028. Currently, high-end models such as iPhone 17 are made in India. The overall sales of iPhones contributed by India have improved from 0.5 percent at the beginning of local manufacturing operations to 10.4 percent at present. Currently, India represents Apple’s third-largest market. The profit of Apple India has risen by 16 percent in the ongoing year to ₹3,196 crore.
Employment and Long-Term Global Competitiveness
- Apple has direct employment of about 350,000 people. Many more jobs are anticipated to be created indirectly at the end of the year. This was achieved through suppliers such as TATA Electronics and Foxconn. About 72 percent of the jobs created are held by females.
- Apple Illustrated that India can make quality employment by connecting with the manufacturing systems worldwide. The sectors based on electronics and machinery have expanded at a greater pace than the conventional sectors that require manual labor. If India is to compete in the world, along with countries such as South Korea and Taiwan, it must attract more multinationals and focus on R&D. The coming years can see the emergence of India as a hub for hi-tech manufacturing. Besides electronics, India can also develop itself in the area of textiles and clothing by attracting the likes of Nike, Gucci, LVMH, and even the likes of Zara.
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