India has officially become the most populous country in the world, surpassing 1.4 billion people. A significant portion of this population—around 50%—is under the age of 30, with one-quarter falling between 15 and 29 years old, and another quarter within the 0–14 age group. This youthful demographic presents a strong demand for technology products, particularly among the younger generation, which is the primary driver for electronics consumption. As a result, India’s electronics sector is witnessing rapid growth, fueled by government efforts to make the country a global leader in tech production.
In January 2022, the Indian government set a target to reach US$ 300 billion in electronics production by 2025-26, with a major focus on smartphone exports. This has helped propel India to the position of being the second-largest mobile phone manufacturer globally, housing over 200 manufacturing facilities across the country. With rising consumer spending power, the expanding Indian market presents substantial opportunities for international companies.
In 2014-15, India’s domestic production of mobile phones accounted for just 25% of the national demand. However, over the past decade, India’s mobile phone manufacturing has grown exponentially. In FY24, the sector reached Rs. 4.1 lakh crore (US$ 49.27 billion) in production, up from just US$ 3 billion in FY15. This remarkable growth can be attributed to several government initiatives, including the Production Linked Incentive (PLI) scheme and the Make in India program.
This surge in domestic production has allowed India to meet 97% of its own mobile phone demand. In 2018-19, India’s domestic production matched demand, and since the launch of the PLI scheme in March 2020, production has steadily risen from US$ 30 billion to US$ 49 billion by 2023-24.
Growth in Exports and Global Standing
India’s export of mobile phones has also seen impressive growth. In 2022-23, mobile phone exports surged by 91% compared to the previous year, making smartphones one of India’s top five export products. According to the Ministry of Commerce, smartphone exports grew by 42% in 2023-24, reaching US$ 15.6 billion, up from US$ 11.1 billion in the previous year. As a result, mobile phones became India’s fourth-largest export item, and the country emerged as the sixth-largest global exporter of mobile phones in 2022.
This export growth aligns perfectly with the government’s ambitious goals for the electronics sector. India’s increasing role in global smartphone manufacturing highlights the effectiveness of policy support and the need for continued investment to maintain its upward trajectory.
The Growth of India’s Smartphone Manufacturing Sector
India’s journey to becoming the second-largest smartphone manufacturer is driven by several key factors:
Government Initiatives: India’s Make in India initiative, launched in 2014, played a pivotal role in boosting local manufacturing. By offering attractive incentives to global and local companies, the Indian government created an environment that encourages businesses to set up manufacturing plants in the country.
Increased Local Production: Major smartphone brands, including Samsung, Apple, and Xiaomi, have significantly ramped up production in India. Samsung, for instance, has one of its largest mobile phone manufacturing plants in Noida, which produces millions of devices annually. Apple also began shifting some of its production from China to India, leveraging the country’s large labor pool and cost advantages.
Skilled Workforce: India’s growing skilled labor force in fields like engineering and assembly is a critical factor in the country’s rise. The availability of affordable labor, combined with world-class manufacturing practices, has made India an attractive destination for smartphone makers.
Rising Domestic Demand: India is home to over 1.3 billion people, and the demand for affordable smartphones has surged in recent years. This has attracted both international and domestic companies to ramp up production, contributing to India’s position as a manufacturing hub.
Key Benefits of India’s Smartphone Manufacturing Boom
India’s growth as a manufacturing hub for smartphones comes with several benefits:
- Job Creation: India’s smartphone manufacturing sector has created millions of jobs, from factory workers to engineers and sales professionals, helping reduce unemployment and increase economic activity.
- Boost to Local Economy: As smartphone production grows, the local economy benefits from the increase in exports and the development of local suppliers for components such as screens, batteries, and chips.
- Technological Advancements: Increased smartphone manufacturing has encouraged technology transfer, bringing advanced manufacturing techniques to India and making the country a more attractive destination for tech-related investments.
India’s Competitive Edge in the Smartphone Market
India’s ability to scale its smartphone manufacturing sector has made it competitive in the global market. Here’s why India stands out:
- Cost Advantage: India offers a lower cost of labor compared to China, making it an ideal choice for companies looking to reduce production costs.
- Strategic Location: India’s proximity to key markets in the Middle East, Southeast Asia, and Africa provides manufacturers with easy access to these fast-growing markets, further boosting its global appeal.
- Government Support: The Indian government has provided consistent support in the form of subsidies, tax incentives, and infrastructure development, making the country an attractive destination for investment.
Challenges to Overcome
Despite these advantages, there are still challenges that India faces in solidifying its position as a global leader in smartphone manufacturing:
- Supply Chain Issues: India’s smartphone manufacturing is still somewhat dependent on imports for critical components like chips, which poses a risk to the stability of production.
- Infrastructure: While progress is being made, India’s infrastructure still requires significant upgrades, particularly in the areas of logistics and transportation.
- Competition: India faces stiff competition from China, the world leader in smartphone manufacturing. While India is growing rapidly, matching China’s scale and efficiency will take time.
Future Outlook: Can India Become the World’s Largest Smartphone Manufacturer?
Looking ahead, India has the potential to challenge China’s dominance in smartphone manufacturing. With ongoing government support, growing demand, and increasing local innovation, India is well-positioned to continue its rise. As Indian manufacturers ramp up production and local component suppliers strengthen their supply chains, India could eventually overtake China as the largest smartphone manufacturer in the world.
FAQs
Why is India the second-largest smartphone manufacturer?
India’s growth is fueled by government initiatives, increased local production, a skilled workforce, and rising domestic demand.
Which smartphone brands manufacture in India?
Major brands like Samsung, Apple, and Xiaomi have established manufacturing operations in India.
What is the impact of India’s smartphone manufacturing growth?
It has created millions of jobs, boosted the local economy, and made India a competitive player in the global tech market.
What challenges does India face in smartphone manufacturing?
Key challenges include reliance on imported components, infrastructure gaps, and competition from China.
Will India surpass China in smartphone manufacturing?
India has the potential to become the world’s largest smartphone manufacturer, but overcoming competition and supply chain issues will be crucial.
How has government support helped India’s smartphone sector?
The government’s Make in India initiative and financial incentives have been vital in attracting global smartphone makers to invest in India.
Conclusion
India’s rise as the second-largest smartphone manufacturer in the world marks a pivotal moment in the global tech industry. With continued government support, a growing labor force, and increasing local demand, India is set to continue its upward trajectory. While challenges remain, the country’s rapid growth presents significant opportunities for both local and international businesses to thrive in the expanding smartphone market.