New Delhi, Feb 25 (IANS) With the 'Make in India' plan for mobile phone manufacturing revolving only around assembling, India had to import $13 billion worth of mobile components in 2018, Counterpoint Research said on Monday.
According to Tarun Pathak, Associate Director at Counterpoint Research, not many high-value components are being sourced from India.
"As a result, local value addition in India was at 17 per cent during 2018. This helped the country save $2.5 billion in forex but increased assembly operations in India led to imports of mobile phone components going up to $13 billion," he added in a statement.
The Ministry of Electronics and Information Technology's Phased Manufacturing Programme (PMP) is running behind schedule as the implementation of customs duties under Phase III, which targets Display Assembly, Touch Panel/Cover Glass Assembly and Vibrator/Motor Ringer has been delayed, said the report.
According to Pathak, the possibility of original equipment manufacturers (OEMs), like Reliance Jio and several Chinese brands, to source chips locally is still nearly four to five years away.
"Sourcing of chips locally will happen only once the component ecosystem for low-value components is strengthened and export incentives are brought into force," he added.
Reliance Jio was still catching up on the PMP and imported 40 per cent of Jio Phones in 2018.
In fact, Chinese players like Xiaomi, OPPO, and Vivo had transitioned better from semi-knocked down (SKDs) to completely knocked down units (CKDs).
These companies also have plans to scale up their local manufacturing operations, albeit limited to assembling only.
Half of the handsets sold in India in 2018 were imported as SKDs while only 34 per cent were imported as CKDs.
However, by the end of this year, handsets imported as CKDs are forecast to reach 75 per cent while 25 per cent will be in the form of SKDs.
"We think that the government will first push to localize the components or sub-components under PMP to drive value addition. This can lead a transition from SKDs to CKDs quickly over the next two years," Pathak added.
While there has been a delay in the implementation of the PMP, India has made significant strides in developing its mobile manufacturing ecosystem.
Local value addition has risen from a meagre 6 per cent level in 2016 to 17 per cent in 2018 and there are now 120 assembling plants in the country as compared to just two in 2014.
"While China and Vietnam seem to be way ahead in terms of local value addition, India has surpassed Vietnam to become the second largest mobile phone manufacturer by volume," said Hanish Bhatia, Senior Analyst at Counterpoint Research.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz
This website uses cookies.