- 2020 has been a rather unpredictable year.
- We were almost forced to sit within the confines of our homes for nearly 6 months, work-from-home has become the new norm, and there has been renewed interest in purchasing Indian-made products.
2020 has seen a shift in consumer behavior, as consumers want to promote and encourage local manufacturers by purchasing Indian-made products. However, the question on everyone’s mind is, can we manufacture a complete made-in-India mobile phone? We will unravel the mystery.
2020 has been a rather unpredictable year. We were almost forced to sit within the confines of our homes for nearly 6 months, work-from-home has become the new norm, and there has been renewed interest in purchasing Indian-made products.
While the first two instances were because of the pandemic, the last issue was because of external factors that directly impacted the socio-political landscape. In fact, the Indian government has also released a decree for Indian telecoms to avoid purchasing equipment from Chinese companies.
Amidst the rather tenuous and volatile relationship between India and China, Chinese smartphone brands have established manufacturing units and assembly facilities in various Indian cities.
It wasn’t just the Chinese brands that took this step; even companies like Apple and Samsung now have manufacturing facilities within the country. This was done primarily for two reasons: because of the import duty hike, which stands at 20 percent for smartphones, and because of the GST hike, which was increased to 18 percent from 12 percent.
However, the Indian government has also extended incentives that are worth more than US$ 6 billion to 16 smartphone companies, for their mobile phone production facilities.
These steps were taken to push the country towards self-reliance, while also creating a pathway to make India a global hub for smartphones. This has also rekindled the local sentiment of purchasing smartphones that are manufactured in India, thereby helping the local brands and the thousands of Indian workers that are now employed by smartphone companies.
Can India manufacture a complete made-in-India mobile?
There is a clear distinction between smartphones that are assembled in India that are made by international brands and smartphones that are manufactured by domestic mobile phone companies.
To provide a boost to local manufacturers, the government recently announced the production-linked incentive (PLI) scheme, worth Rs. 40,995 crore, which is great news for brands like Micromax, Karbonn, Intex, and Lava.
In fact, Micromax recently announced that it would start producing smartphones once again, and is eyeing a triumphant return to the smartphone industry.
However, even Indian mobile brands rely heavily on smartphone components made in China, Taiwan, and Korea. India recently moved from a semi knocked-down type of manufacturing (SKD) to a completely knocked-down type (CKD).
While that is good news when it comes to the assembly side of things, Indian mobile brands rely on Chinese manufacturers for the most important components of a smartphone, which are the chipset, RAM, and the phone display.
To develop a chipset and RAM, we require high-end technology, along with various other essentials, such as uninterrupted water supply, electricity supply, and skilled labor in order to run automated machines, which the local manufacturers still do not have.
For instance, if you have to purchase an 8GB RAM phone, there are no Indian mobile brands that can offer you a smartphone that is completely made in India that comes with 8GB RAM.
Today, only parts like chargers, batteries, and other packaging materials are made in India, while the rest are imported from other countries.
So what has the Make in India Initiative accomplished?
As per the IDC’s data, because of the Make in India initiative, the local production of smartphones has gone from 40 percent SKD units to around 95 percent assembling of CKD units.
That is, we went from getting 40 percent of phone parts that were initially assembled, and were then taken apart and imported to India, to getting around 95 percent of just the components that are then locally assembled, resulting in the final product.
However, India is still far away from being able to manufacture smartphone devices from scratch because of various reasons. This is primarily due to the challenges faced by the Indian mobile brands on multiple fronts, including the scarcity of important resources such as the continuous supply of water and electricity, logistics, long-term investments, and greater emphasis on research and development, along with the lack of skilled labor to control the automated machines.
So what will it take for the local brands to be able to start manufacturing smartphones? For one, we still do not have the technical expertise we would need to develop chipsets and RAMs.
However, with the recent focus on Indian-made products, it might not take too long for the Indian brands to bring in expert help, and train the local workforce. While the current priority is to make India a global smartphone hub, we can also start manufacturing our own smartphones within the next couple of years.