Mobile Phones Made In India But Local Value Addition Needs To Increase: Govt

In a recent development, a senior official from the Ministry of Electronics and IT (MeitY) highlighted the need to enhance local value addition in mobile phones manufactured in India. The official, S Krishnan, was speaking at the Global Technology Summit 2023, where he emphasized the importance of building a robust component base within the country.

Current Scenario of Mobile Phone Manufacturing in India

Krishnan acknowledged that almost all mobile phones sold in India are now made indigenously. However, he pointed out that the local value addition in these devices is still relatively low, hovering around 10 to 15 percent. To achieve a more sustainable and self-reliant mobile phone manufacturing ecosystem, Krishnan emphasized the need to increase local value addition to 35-40 percent.

Building a Component Manufacturing Base in India

Krishnan highlighted the government's focus on building a strong component manufacturing base in India to support the growth of the mobile phone industry. He acknowledged that achieving 100 percent local value addition for high-technology products is unrealistic, given the global nature of the supply chain. However, he stressed the importance of bringing component manufacturing to India to increase domestic value addition and reduce reliance on imports.

Addressing Concerns about Value Addition under PLI

Krishnan also addressed concerns raised by some economists regarding the level of value addition achieved under the Production-Linked Incentive (PLI) program. He clarified that the PLI program is part of a global value chain and that no country, including China, has achieved more than 40-45 percent of the value chain embedded within its borders. He emphasized the need to recognize the complexities of global supply chains and the challenges in achieving complete self-sufficiency.

Importance of Collaboration and Global Cooperation

Krishnan cited the statement of NVIDIA CEO Jensen Huang, who emphasized that it would take the United States 20 years to establish a complete semiconductor chip manufacturing ecosystem. He used this example to highlight the interconnectedness of the global economy and the importance of collaboration and cooperation among countries. Krishnan argued that, in today's interconnected world, it is neither feasible nor desirable to aim for 100 percent domestic production of high-value products.

The Indian government's focus on increasing local value addition in mobile phone manufacturing is a step towards building a more resilient and self-sufficient domestic industry. By prioritizing the development of a component manufacturing base and recognizing the importance of global collaboration, India aims to enhance its mobile phone manufacturing capabilities and reduce reliance on imports. This strategy will not only strengthen the domestic economy but also contribute to the growth of the global technology ecosystem.