UP Leads Mobile Manufacturing in India: Accounts for Almost Half the Production

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Aarzu Khan
A full-time data scientists and a part-time industry analyst; still learning power of effective presentation and firm believer of the thought "Numbers are always magical". Love to be in the network of people who 'know' how to respect their time and keep others engaged in meaningful activities.

Just a few months back, Dazeinfo reported that India had crossed the 100 million mark in mobile phone manufacturing, thanks to the Make in India campaign started by the honourable prime minister of the country, Mr Narendra Modi. The major contribution to this incline in production rates is from UP (Uttar Pradesh), according to a report released by the Department of Industrial Policy and Promotion. The state accounts for a production capacity of 10 million mobiles which is almost half the production capacity of 20.7 million in the country. The state houses around 13 mobile manufacturing units out of a total 38 units set up in the country since September 2015. The remaining units are distributed over Delhi, Andhra Pradesh, Haryana, Uttarakhand, Maharashtra, Telangana, Jammu and Kashmir, Himachal Pradesh, Tamil Nadu, West Bengal and Daman, as per the report.

However, the Indian Cellular Association (ICA) asserts that there were 39 such units in the country as of July 2016, reports the Economic Times. Out of these 39, 15 plants are in UP with a production capacity of 13.1 million units per month.

ICA also reported that mobile handsets worth INR. 54,00 crore were produced in 2015-16 showing a growth of almost 185% in terms of money.

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Mobile Manufacturing in India: Rs. 15 Laks Crore Market

Furthermore, the progression doesn’t stop here. ICA reports that the production rates are going to increase further.

“In the current financial year, manufacturing is estimated to grow to Rs. 94,000 crore, which would be an estimated 75 per cent year-on-year growth,” ICA said.

According to a report, titled “India Monthly Mobile Handset Market Review” from market research firm CyberMedia Research’s (CMR), about 197.5 million mobile handsets were shipped in India by the end of September 31, 2016; of which 78.4 million were alone shipped during the third quarter of the calendar year.

However, according to ICA, “the industry aims to produce 50 crore mobile handsets annually in the country with value around Rs 1.5-3 lakh crore by 2019 and production of 125 crore handsets with an estimated value of Rs 15 lakh crore by 2025-26.”

Domestic Companies Growing?

The increasing local production of the mobile handsets has affected the import of devices, which has been reduced by 4% in 2015-16 as compared to 2014-15. The import is estimated to drop by over 29% further in the current fiscal over 2015-16, according to ICA.

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Also, the contribution of domestically manufactured mobile phones has increased from 14% in 2014 to 67% in 2016 and is further estimated to reach 96% by 2020, according to a study done by IIM Bangalore and market research firm Counterpoint Research, reports Indian Express.

India currently contributes only about 6% of the value of phones sold in the country through local manufacturing or assembly, but that contribution could rise to more than 30% in the next five years, according to the same study.

Earlier in the year, a report by Counterpoint, an independent market research and consulting firm, stated that Modi’s Make India Campaign had played a pivotal role in helping India to beat the US with more than half of the smartphones sold in India during the quarter made under the Make in India project. The report also says that growing local manufacturing capacity has helped domestic brands such as Intex and Lava to close the gap with the second largest mobile phone or the number one domestic mobile phone brand Micromax.

India to Emerge as the Global Leader?

As already established by Counterpoint’s report, India has already surpassed the US to become the second biggest smartphone market in the world with an annual growth rate of 15% in Q4 2015.

Also, with the deteriorating Chinese economy, and the rising growth of manufacturing in India, the day is not far when India will overtake China in terms of mobile manufacture, according to the panel discussion at the recently held India Telecom Summit 2016.

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