The government should provide both production-based and export-oriented incentives to make domestic manufacturing of mobile handsets competitive, a report from the Internet and Mobile Association of India (IAMAI) has suggested.

Currently, countries such as China and Vietnam provide incentives to the industry to make their domestic manufacturing competitive. India suffers from several hurdles compared to competing markets such as China, Vietnam, Indonesia and Mexico. These include challenges such as an under-developed infrastructure and logistics network, and lack of tax benefits, according to the report.

The report, titled Make in India 2.0 Revisiting Mobile Manufacturing, highlighted that to promote mobile handsets exports, it is important to match the incentives provided by competing countries and surmount the obstacles the country faces.

Manufacturing capacity

The country also needs to capture the market for high-end smartphones, the report said. Currently, India serves as a base for manufacturing mostly low-end mobile phones.

It said that selling higher-end phones will help India achieve its 2025 target of $110 billion in mobile exports.

According to the report, the global handsets market is worth around $467 billion, and this demand is met almost entirely by China, Vietnam, South Korea and Taiwan.

It added that India does not have a meaningful role to play in the global market, owing to the severe manufacturing constraints that it suffers from.

Speaking at the launch of the report, Amitabh Kant, CEO, NITI Aayog, said: “Our policy would be export-oriented, with mobile devices being the largest segment. The government has formed a committee which will work towards making India a large-scale manufacturer and making the country an integral part of the global supply chain.”

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