India’s smartphone manufacturing ambition gathers pace

India smartphone
Assembling and quality control of smartphones at the factory of their production. Photo by LudYy |

Multinational smartphone makers have accelerated their efforts to begin manufacturing in India to benefit from regional schemes introduced by the Indian government.

HMD Global, the maker of Nokia-branded phones, has inked a pact with home-bred handset maker Lava International to locally produce smartphones. Lenovo-owned Motorola is also in advanced talks with Lava to ink a similar deal and leverage the latter’s manufacturing factories in North India.

The Chinese handset maker, which is aiming to manufacture $1 billion worth of smartphones in India for both domestic and global needs, is also talking to India’s Dixon Technologies.

Apple’s second-largest contract manufacturer, Pegatron, has also started work to set up a manufacturing facility in India having received approval from its board. It is expected to set up its facility in Tamil Nadu, which also houses Foxconn’s Apple factory.

Pegatron’s board has approved an initial investment of $150 million for the India factory, which is likely to begin production for Apple in the second half of next year or in early 2022.

Pegatron’s chief executive officer Syh-jang told Taiwanese media that the company plans to make more investments in India over the next two years.

India’s Telecom and IT Minister Ravi Shankar Prasad recently said that nine companies from the Apple ecosystem have shifted their base to India.

The Economic Times separately reported that Lava International is looking to partner with handset companies that can share supply chains.

“Lava is already making smartphones for Nokia [HMD Global]. It is looking to combine forces on the supply-chain front…Lava wants to work with important companies that are from outside of the ecosystem in India so that their supply chain can be combined,” a person was quoted as saying by the publication.

Lava International, which also makes smartphones for US carrier AT&T, recently got approval under the Production Linked Incentive Scheme (PLI) by the Indian government, which aims to create India an export hub for smartphones.

Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics, were also approved under the PLI scheme. All approved local players proposed production output of $16.89 billion over the next five years, India’s Ministry of Electronics and Information Technology recently revealed.

According to market tracker techARC, India’s mobile phone exports in 2020 are expected to record the highest ever shipments of $1.5 billion by value, 98% of which would be smartphones.

A total of 12.8 million mobile phones were exported from India from January to September 2020. Of this, there were 10.9 million smartphones.

Samsung exported 9.8 million units of smartphones followed by Xiaomi at 0.6 million and Lava at 0.2 million smartphones during the January-September period.   “Lava has emerged as the ‘torchbearer’ Indian brand which is not only the lone domestic brand exporting mobiles but also pecks in top 5 brands,” techARC said.

“India has been exporting mobiles to destinations like UAE and neighbouring SAARC countries for quite some time.  However, ‘Make in India’ initiative has made India a truly global exporter of mobile phones,” Faisal Kawoosa, Founder & Chief Analyst, techARC said.

“Today, India is exporting to 24 countries, some of which are further re-exporting, like UAE, to other markets making Indian made phones available to millions of users…the PLI scheme, which was approved in favour of 16 electronics companies including 10 mobile handset manufacturers will further strengthen India’s positioning in the global mobile market and complement manufacturers’ goal of making India a global hub of mobile production,” Kawoosa added.

The Economic Times report added that Lava is in advanced discussions with one of the top Indian telecom operators to make co-branded smartphones, which will be subsidised by the operator, pulling the cost sharply down for the 4G device.

Media reports previously suggested that Bharti Airtel was talking to various local handset players to develop low-cost 4G smartphones to migrate its 2G subscribers to its expanding 4G network. The move is also aimed at protecting its 2G subscriber base before Reliance Jio brings its ultra-affordable 4G smartphone which is currently in the works with internet major Google.

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