The Indian government plans to roll out a new scheme, boosting manufacturing of mobile parts in India, targeting a 30% value addition within 7 years.
The Indian government seeks to introduce a new incentive scheme to significantly enhance the country’s local production of electronic components used in mobile phones. This plan targets increasing India’s value addition in mobile phone manufacturing from the current 15% to a robust 25-30% over the next seven years.
Under the new scheme, manufacturers will receive incentives for focusing on 12 critical sub-assemblies of mobile phones. These incentives will be linked to key performance metrics such as production volumes, capital expenditure investments, and job creation. This initiative is expected not only to bolster local manufacturing but also to foster significant technological advancement within the sector.
India, having emerged as the second-largest mobile phone manufacturer globally after China, is now setting its sights on deepening its value addition and expanding into other IT hardware areas, including servers and chips.
The government’s strategy aligns with the broader global shift in the electronics supply chain, moving away from China and seeking new opportunities in other regions.
The new scheme also emphasizes a strategic move into non-semiconductor components, which constitute about 50% of the material costs in mobile phones and laptops.
While thin profit margins characterize the mobile assembly sector, the shift towards component manufacturing is expected to offer higher margins despite potentially lower asset turnover rates.
The initiative is poised to not only drive industrial growth but also contribute to a more robust economic future for the nation and the global electronics manufacturing landscape.
