Smartphone Manufacturing India’s dream of becoming a smartphone manufacturing giant has taken a dent. The mobile production units that have been set-up by the government are underperforming severely. Smartphone manufacturing units that were set up to compete with Chinese manufacturing units have disappointed. Moreover, the industries have not been able to make India a major player in the smartphone manufacturing industry.
The smartphone manufacturing industries are set up under the government’s production-linked incentive (PLI) scheme. Government of India established these industries with the cushion of incentives for some time.
In a recent research report from research firm Counterpoint Research, a different conclusion can be made. The data in the report certifies that India’s mobile phone production capacity reached over 500 million units by the end of 2024.
Smartphone Manufacturing Figures
However, the Electronic Industries Association of India (ELCINA) report has provided a different estimate. ELCINA has provided a figure that is lower than government claims of 400-420 million units. Moreover, the report by Counterpoint Research says that the actual production remains around 250 million units annually. Precisely 200 million smartphones are catering to the domestic market and the rest mainly iPhones are being exported.
Smartphone production units like Dixon Technologies, Samsung Electronics, Tata Electronics, and Hon Hai (Foxconn) are driving production. These Production units have been set up by the government under the PLI since these are eligible for it.
However, smaller domestic smartphone manufacturing units have not been able to achieve targets. Some of the smaller manufacturers include Lava International, Karbonn, and Micromax. Additionally, these manufacturers have now switched to manufacturing telecom equipment and wearables. Since their mobile production business isn’t profitable.
Manufacturing Slowdown Reason
- Declining Demand
The primary reason that several reports and experts are claiming for slowdown is declining demand. Market analysts and Industry executives state shrinking demand for feature phones and entry-level smartphones for slowdown. Feature phone shipments declined by 14 per cent year-on-year in the third quarter of financial year 2024-25. Meanwhile 46 per cent drop in 4G feature phones has been reported.
Although India’s mobile phone manufacturing sector is currently facing challenges. Mostly due to weak demand and the existing underutilized capacity. However global demand surge is anticipated from 2025 and could improve utilization rates.
ALSO READ: PAN Card 2.0 Scam Alert: Protect Your India Post Payments Bank Account – Details Inside
