India Now Is World's Second Biggest Manufacturer And Consumer Of Mobile Phones

A Swarajya report in January 2020, noted a major milestone in the growth of mobile phone usage in India.

It cited a report by market researcher Counterpoint which said “The India smartphone market surpassed the US for the first time on an annual level, becoming the second-largest smartphone market globally, reaching 158 million shipments in 2019”.

A big domestic market was good news. But how much of this demand was met by phones manufactured in India?

Not a big chunk at the time, but  just over three-and-a-half years later, Counterpoint has released another report this week which signposts a new milestone.

It says: “India has become the second-biggest mobile phone-producing country in the world” (after China).

It states “Made-in-India mobile phone shipments crossed the 2-billion cumulative units mark under the ‘Make in India’ initiative during 2014-2022, registering a compounded annual growth rate  (CAGR) of  23%. The huge internal demand, increasing digital literacy and government push are the major reasons for this growth”.

“The Indian government has introduced schemes and initiatives such as the Phased Manufacturing Program (PMP), Make in India, Production Linked Incentive (PLI) and Atma-Nirbhar Bharat (Self-Reliant India) to increase local manufacturing and value addition”. 

Local value addition

Counterpoint's Research Director Tarun Pathak says: “India has come a long way in mobile phone manufacturing. We have seen local manufacturing increase over the years to meet domestic demand. In 2022, more than 98% of shipments in the overall Indian market were ‘Made in India’, compared to just 19 per cent when the current government took over in 2014".

"We have also seen increasing local value addition and supply chain development in the country. Many companies are setting up units in the country for manufacturing mobile phones as well as components, leading to growing investments, increasing jobs and overall ecosystem development. The government now intends to capitalize on its various schemes to make India a ‘semiconductor manufacturing and export hub".

Pathak further suggests: “We may see increasing production, especially for smartphones, as India gears to bridge the urban-rural digital divide and also become a mobile phone exporting powerhouse”.

Senior Analyst Prachir Singh adds “Under the ‘Make in India’ initiative, the government introduced the Phased Manufacturing Programme and increased import duties on completely built units and some key components over the years to push local manufacturing and value addition. Under the Self-Reliant India scheme, the government introduced the Production Linked Incentive (PLI) scheme for 14 sectors, including mobile phone manufacturing. Due to all this, exports from India have increased”.

According to an earlier Counterpoint report, 'OPPO' leads the ‘Made in India’ smartphone shipments with a 24 per cent share, followed by Samsung.  Oppo plants also make phones for the realme and OnePlus brands, while Bharat FIH manufactures smartphones for Xiaomi. Dixon Technologies manufactures smartphones for Samsung.

Dixon is an interesting example of a domestic  player, with a major  chunk of the phone manufacturing business. The Noida -headquartered  Dixon is the biggest Electronic Manufacturing  Services (EMS)  company  for the smartphone industry. Its 18 plants across India also make TVs, set top boxes, home appliances and lighting solutions, medical electronics and security systems for its clients.

Nokia, the pioneer

The indigenous manufacture of mobile phones in India  has an almost-two-decade history: Nokia was the first mobile phone manufacturer to set up an India operation in 2006, in its plant in Sriperumbudur near Chennai. 

At its height, the Nokia India facility was one of the largest manufacturing units in the world, employing 30,000 and producing 10 million mobile phones a year. The plant closed in 2014, when Microsoft acquired Nokia’s phone and devices business worldwide.

It was revived by a Finland-based contract manufacturer Salcomp, in 2020, to manufacture phone chargers and other electronics accessories. Some of these  may have found a market next door when  Foxconn launched its own  plant in Sriperumbudur to make iPhones.

Today, Apple iPhones are manufactured in India by its contract manufacturers Foxconn, Pegatron and Luxshare. Wistron, which also  made iPhones  in India  was acquired by the Tata group which thus becomes the fourth manufacturing partner for Apple in India.

Last week Swarajya reported citing Bloomberg,  that Foxconn would be manufacturing the latest iPhone 15 series  in India for a September2023 launch.

These trends, attracting makers of premium phones to India-based plants may further heighten the biggest news in 2023 – that India makes the phones it uses.