The largest mobile phone manufacturers in the world, including Apple, Samsung, Huawei, Vivo, OPPO and Xiaomi need to scale up their exports from India to meet the goals of the National Policy on Electronics (NPE) 2019, the India Cellular and Electronics Association (ICEA) Chairman has said.
The NPE 2019 has set the aim of promoting domestic manufacturing and export in the entire value-chain of ESDM (Electronics System Design and Manufacturing) for economic development to achieve a turnover of Rs 26 lakh crore by 2025.
This will include targeted production for export of 100 crore mobile handsets by 2025, valued at approximately Rs 13 lakh crore, including 60 crore mobile handsets valued at approximately Rs 7 lakh crore.
"Though mobile manufacturing in India has done very well in the past 4-5 years, the exports from the country is very less compared to the major exporters in the world," ICEA Chairman Pankaj Mohindroo told IANS in an interview.
Exports of mobile phones from India is expected to hit $4 billion (Rs 28,571 crore) this year, according to an estimate by ICEA.
The global mobile phone market was about $495 billion (Rs 35.3 lakh crore) in 2018-19, which is projected to touch $648 billion (Rs 46.2 lakh crore) by 2025, according to India's electronics industry body.
China and Vietnam together accounted for about two-thirds of global exports of mobile handsets in 2018-19, with China alone accounting for more than half of world exports of these products.
Both these countries provide their mobile phone industry several monetary, fiscal incentives and state support.
"The policy support that Vietnam provides to its mobile phone industry renders India uncompetitive by 10-12 per cent," Mohindroo said.
In a further setback for India, the World Trade Organization (WTO) this year ruled that certain provisions of India's export subsidy programmes violated the trade body norms.
In its recommendation for Union Budget 2020-21, ICEA has suggested that the four per cent Merchandise Exports from India Schemes (MEIS) should continue and suitable budget provisions must be made.
"The adverse WTO judgement on export incentives can pour cold water on our great expectations of growth of exports of mobile phones which will hit $4 billion this year. We have made progress in both smartphones and component segments. It is critical that, till such time, the MEIS is replaced with a WTO-compliant scheme or a combination of schemes," ICEA said.
While emphasising on increasing exports of mobile phones by the largest manufacturers, Mohindroo also said that the government must support Indian companies like Micromax, Intex, Lava and Karbonn, also called MILK.
"Nations become strong when their companies become strong. Indian mobile phone manufacturers can become strong when they become competitive and when they are supported by the government," he said, adding that a new mobile phone manufacturing cluster in Hyderabad is likely to come up soon.
"What is required for achieving the goals enshrined in NPE 2019 is that we need the growth of global value chains. So the large 5-6 manufacturers will have to boost exports from India. On the other hand, the Indian champion companies who have got impacted should able to develop the entry level market and become large producers of entry level phones for the world," Mohindroo said.
To give Indian "champion" companies a boost, the ICEA recommended that a budget head should be opened in the Union Budget with an allocation of Rs 1,000 crore.
(Gokul Bhagabati can be contacted at firstname.lastname@example.org)