India has achieved a significant milestone in the mobile phone manufacturing industry, emerging as a global hub and producing 97% of its total demand domestically. This remarkable feat has been attributed to government policies and initiatives that have attracted global players and stimulated local production. With mobile phones now being India's fifth-largest export commodity, there are valuable lessons to be learned from countries like Vietnam, which have become export giants in the field.

Explosive Growth in Mobile Phone Production

According to a report by the India Cellular and Electronics Association (ICEA), mobile phone manufacturing in India has experienced a staggering 21-fold increase in value, reaching ₹4.1 lakh crore in the last decade. This growth reflects an increase of 2,000% from ₹18,900 crore in 2014-15 to the estimated ₹4,10,000 crore in the financial year 2023-24. The exponential rise in production has been accompanied by a significant boost in exports, with the industry expecting to reach ₹1.2 lakh crore by the end of FY24, marking a 7,500% increase over a decade.

Government Initiatives and Policies

The Indian government's Phased Manufacturing Programme (PMP), launched in May 2017, played a pivotal role in promoting domestic production of mobile handsets. Under this initiative, the government incentivized large-scale manufacturing and created a conducive policy environment. From just two mobile phone factories in 2014, India has now become the second-largest global producer. The Production Linked Incentive (PLI) scheme for Large-Scale Electronics Manufacturing and IT hardware has further contributed to India's competitiveness in electronics manufacturing. The scheme offers incentives to eligible players, attracting leading global contract manufacturers such as Foxconn, Pegatron, Rising Star, and Wistron to establish production bases in India.

Export Growth and Market Dominance

India's success in mobile phone manufacturing has also paved the way for significant growth in exports. The ICEA report highlights that 30% of the production in FY24 will be dedicated to exports. Devices manufactured in India are already being exported to countries like the United Kingdom, the Netherlands, Austria, and Italy, as well as West Asian, North African, and South American markets. This export growth has propelled mobile phones to become India's fifth-largest export commodity. The country now seeks to learn from other export giants like Vietnam to further expand its global market presence.

Learning from Vietnam's Success

Vietnam, known for its thriving electronics manufacturing industry, provides valuable lessons for India's journey towards becoming an export giant. India can examine Vietnam's strategies and identify areas for improvement in terms of infrastructure development, ease of doing business, and a skilled workforce. By fostering a close working relationship between industry stakeholders and key government ministries, such as the Ministry of Electronics and IT, DPIIT, Ministry of Commerce, Ministry of Finance, NITI Aayog, and the Prime Minister's Office, India can create a conducive environment for growth and attract more global players.