Mobile phone to source $15 billion components locally under Make in India

The Indian mobile phone industry will source $15 billion components locally under Make in India over the next five years (2016-2020) says a joint study from IIM Bangalore and Counterpoint Research. 
                                                                                                                        
In this five-year period, close to a billion smartphones, together with almost half a billion feature phones, that will be sold in India and will consume more than $80 billion worth of components. 
 
Releasing the report, Aruna Sundararajan, secretary, ministry of electronics & IT, government of India said, "There was plenty of work ahead on fronts such as tariff regime, skill development, design and creation of strong infrastructure to aid the formation of electronics manufacturing clusters and the government would have to work with local industry and several partners to achieve this. 

“India can potentially be world leader in mobile phone manufacturing ecosystem and this has to be done in a phased manner,” added Sundararajan.
  
Ajay Kumar, additional secretary, ministry of electronics & IT said, “During the last 18 months, 40 new mobile phone assembly units and 12 new component/accessory manufacturing units have started in the country as part of Digital India initiatives. But mobile phones itself have potential to create electronic manufacturing to the tune of over $250 billion industry. Research efforts like the IIMB study are welcome because they contribute to the understanding and sustaining the momentum of growth in the sector.”
 
Based on the proposed plan and recommendations in the study, IIM Bangalore’s Professor Chirantan Chatterjee, from the Corporate Strategy and Policy Area, who is the lead author of the study, says: “

"The government’s role will be in driving effective duties on key components along with attractive incentive structures, can drive key suppliers to India. In addition, funding engineering institutions and corporations to develop future research (e.g. 5G, automated manufacturing robotics, software, etc.) to build domestic intellectual property (IP) and a strong pool of highly skilled professionals," said Professor Chirantan Chatterjee, IIM Bangalore.  
 
“Under the proposed plan, we estimate that more than $15 billion worth components will be sourced locally over the period of five years through 2020," added Chatterjee.
 
“With this study, we have identified and analyzed more than 60 components and sub-components going into a phone and the possibilities to drive localization of these components over the next five years. To begin with this involves greater investment in industrial design, PCBA design and surface-mount-technology (SMT) level assembly although many of the major silicon components will continue to be sourced from overseas. However, we believe manufacturing of major sub-components of chargers, batteries and cameras can be accomplished locally. Sourcing and assembling these key high-value components and sub-components from local manufacturers will drive greater value addition. This will drive the true local value addition to more than 30 per cent by 2020 and potentially to as much as 50 per cent thereafter,” said Neil Shah, research director, Counterpoint Research.