India Can Beat China In Smartphone Manufacturing By Attracting These 5 Global Brands: Report

India can become a significant part of the global smartphone supply chain by providing a better manufacturing platform for five major global brands.

(Reporesentational Image: AFP)

New Delhi: Five companies are essentially dominating the global mobile phone market and India can utilise the opportunity of providing an assembly platform to these firms, to integrate into the global value chain. These companies are Samsung, Apple, Huawei, Oppo and Vivo;  commanding 83 percent of the total phone revenue in the world. According to the report by the India Cellular and Electronics Association (ICEA) and consultancy major EY, India as already begun receiving initial investments from the 5 companies which subsequently may lead to more manufacturing here. As of now, Lava and Micromax are the Indian companies that are manufacturing phones primarily for the domestic market as they haven't quite established a global consumer base. "Currently, India does not have in-house technology and R&D. Global lead firms can bring in advanced and cutting-edge technology that may not only aid the production processes of global lead firms but also domestic firms," said the report. By becoming a point of distribution and retail, India can become a significant part of the global market chain, this will lead to more job opportunities for the young workforce. For this to happen, however, several issues pertaining to norms will have to be looked at. There are various challenges for companies who will have to face the high cost of power, tax, and ease of doing business. It makes the country 10-20 percent less competitive in comparison to Vietnam and China. "India must address these disability issues in the long run. Meanwhile, in the short run, the government shall endeavor to offset these disabilities by providing incentives which are WTO-compliant, easy to implement and help India take off from the export runway," the report suggested. In the past 5 years, India has used some measures like imposing higher duties on import of finished mobile phones and certain components like batteries, chargers, wired headsets, to nudge manufactures towards assembling them in India. The measure has been partially successful as imports of finished phones have come down with the option to assemble them in India,  the imports of accessories continued due to lack of volumes within India. "The only piece that appears to be missing so far is the policy support to attract lead firms, incentivise production and unveil measures that provide cost competitiveness to the industry or help offset the disabilities suffered by Indian firms vis-a-vis Vietnam and China," the report emphasised. (With Agency Inputs) WATCH | How Chinese Brands Captured Indian Smartphone Market