Know the concept behind the made in India smartphones

Over the last few years, the mobile landscape in India has changed significantly. India is on the go-to market list, after China, to find a success story for a smartphone brand. Today, India is not only the world’s second largest consumer market for smartphones, it is also a country where these devices are made.

We have seen a decrease in duties and an uptake in incentives for manufacturers producing phones in India, with the government’s drive for the “Make-In-India” initiative. Global giants such as Foxconn and Wistron set up production/assembly plants in the country.

Why Make-in-India?

The key attempt is to benefit from a duty agreement that is favourable to those manufacturing and assembling in India. When these companies import a finished product rather than just a component, there are considerable differences in duties.

While importing smartphones have a duty of approximately 12.5 per cent, components have a duty of just 1 per cent. Since mobile manufacturing firms are trying to take advantage of this tremendous change in the duty structure, made in India mobiles make sense.

Additionally, owing to our growth phase, India will offer the volumes that are able to justify investment in a manufacturing or assembly unit here. The potential for growth is huge — plus, the companies are looking at India as the base to feed the growing demand from the rest of South Asia.

There are other benefits related to the government’s production push. According to Mohindroo, incentives such as cash backs on investments in this sector and tax exemptions, along with a preference for domestically manufactured electronics products for government procurement, are available. All good enough for firms to be very interested in made in India mobile phones.

A few bumps on the road

There are also some problems, such as the high rate of taxes on mobile phones and accessories in various jurisdictions, and the lack of incentives for exports.

Plus, the semiconductor plant, product suppliers and design houses ecosystem is still lacking, and before that happens, businesses can only assemble the components they ship while paying lower duties.

For now, the sector remains a mix of components manufactured locally and imports. The possible rise in demand for production in India, which might not be able to scale up as they would with plants in China, is also a concern for manufacturers.

‘Made in India 5G’ push

Reliance Industries Limited (RIL) Chairman and Managing Director MukeshAmbani announced at its 43rd Annual General Meeting (AGM) that Reliance Jio had begun working on next generation 5G connectivity, with Jio already beginning to design and develop a ‘complete 5G solution from scratch.’

As a result, telecom operators will not need third-party vendors (such as Qualcomm or HUAWEI) to use 5G mobile phones and devices.

A new 5G roll-out front in India and beyond is being opened up by MukeshAmbani’s work for Made-in-India 5G technology with Jio 5G, the only independent next-generation technology enabler on the world’s telecommunications horizon.

As part of its partnership with Google, Jio also looks to build an Android-based smartphone operating system. Other plans include exporting 5G solutions.

Bottomline

We do not have a 100% Made in India mobile phone at this juncture. The reason is that it would require a huge capital outlay to manufacture a processor like Qualcomm or MediaTek.

Also, as of now, the materials needed for the production of motherboard parts are not available in large quantities in India. Again, it is difficult to produce semiconductor units in India that compete with China for their new technologies.

We need a concerted plan in which the government, start-ups and businesses join hands in order to improve local growth and sales. Big Indian firms in India need to set up mobile plants.

Although India has already made progress with mobile manufacturing R & D and design laboratories, parts such as camera modules, motherboards and display panels can be bought until we learn to efficiently develop them.

37 telecommunication companies are preparing to set up production facilities in India to provide a total of 165 lakh job opportunities. Last but not least, by buying products made in India, we can also extend our full support to Indian manufacturers as consumers.

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