Encouraging mobile handset exports and components manufacturing will help the country emerge a global hub for handset, according to a report.

The report, “Making India the global manufacturing powerhouse for mobile handsets and components”, by the Indian Cellular and Electronics Association (ICEA) in partnership with McKinsey, said the Government’s Phased Manufacturing Programme (PMP) has helped kickstart the growth in mobile manufacturing. But, it has failed to address export orientation and component and sub-assembly ecosystem.

If these gaps are addressed India could manufacture around 125 crore handsets by 2025, creating 47 lakh jobs in assembling, programming, testing and packaging

Since the launch of PMP in 2014, around 120 manufacturing units have come up in the country. India produced 22.5 crore mobile phones in 2017 valued at $20 billion with export of $0.1 billion. The country is yet to attract major mobile manufacturers.

According to the report, “A suitable policy environment and effective outreach efforts are currently absent in order to promote investments by major component manufacturers under the Make in India programme.”

Key measures

The report recommends imposing duty on imported handsets and components in a phased manner to boost local manufacturing and a robust export promotion strategy through increasing incentives. There should be an easy access to capital for companies in the mobile handset manufacturing and accessories.

Other recommendations include competitive direct tax policy, labour reforms that allow flexible working hours and overtime, ease of doing business, skill development to ensure that talent pool in the field and outreach efforts between the government and industry bodies attracts investment.

It called for a broader focus beyond handsets and components. Targeting growthas seen in China and Vietnam requires tailor-made policies.

Related Topics
comment COMMENT NOW