Mobile phone shipments crossed the two-billion cumulative units mark under the 'Make in India' initiative during 2014-2022, registering a compound annual growth rate of 23%, according to a research report by Counterpoint.

As a result, India has become the second-biggest mobile phone-producing country.

The huge internal demand, increasing digital literacy and government push are the major reasons for this growth, the report says.

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

"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% when the current government took over in 2014," says Counterpoint Research director Tarun Pathak.

This comes at a time when 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.

"We have also seen increasing local value addition and supply chain development in the country. Local value addition in India currently stands at an average of more than 15%, compared to the low single digits eight years ago," says Pathak.

The government now intends to capitalise on its various schemes to make India a semiconductor manufacturing and export hub, he adds. "Going forward, 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," he says.

The government launched its flagship programme 'Make in India' to facilitate investments across sectors in 2014. Attracting higher foreign direct investments (FDIs) in manufacturing was dovetailed with this effort which was supplemented by the rolling out of the PLI scheme across 14 key manufacturing sectors in FY21. According to India Ratings and Research (Ind-Ra), FDI in computer hardware and software increased to $72.7 billion during April 2014 to March 2022 from just $12.8 billion during April 2000 to March 2014.

On the government's initiatives, Prachir Singh, senior analyst at Counterpoint, says, "The Indian government has launched and executed many schemes, which has resulted in a big jump in mobile phone manufacturing over the years. Under the 'Make in India' initiative, the government introduced the Phased Manufacturing Program 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. Going forward, the government is focused on making India a semiconductor hub. It has proposed a semiconductor PLI scheme and now is focusing more on infrastructure with a proposed investment of $1.4 trillion."

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