Almost 96% of mobile phones sold in India will be locally manufactured by 2020: IAMAI

According to a new research, almost 96 percent of mobile phones sold in India will be locally manufactured by 2020.

According to a report titled 'Indian Mobile Phone market: Emerging Opportunities for fulfilling India's Digital Economy Dream' published jointly by the Internet and Mobile Association of India [IAMAI] and Enixta Innovations, India is set to increase its domestic localization rate from 6.1 percent in 2016 to 25.8 percent in 2019, which translates to Rs. 31,000 crore in value generated through local sourcing and assembly.

The huge potential for improvement in local value addition further highlights enticing opportunities for entrepreneurs in realizing the digital India dream, while providing a fresh impetus to the country's 'Make in India' program for mobile phones manufacturing, thereby reducing our dependence on tech imports.

The report has highlighted that India is today the second largest smartphone market in the world in terms of a number of users, connecting more than 292 million people across the country. India is projected to be the single biggest market for global smartphone sales in the next few years.

Speaking at the launch of the report, Ajay Kumar, Additional Secretary, MeitY exuded confidence that in the next 5 to 10 years, 25 percent or 30 percent of the global economy will be actually determined by the digital economy. He said, "the Internet economy is the biggest opportunity in India and has the potential to be bigger than the ITeS industry, going forward."

The report further states that the size of the domestic mobile manufacturing industry in FY 2019-20 is expected to be Rs. 135,000 crore as compared to Rs. 94,000 in FY 2016-17.

The demand for the mobile phones in India is largely met through imports. Much of the domestic mobile phone production in India is limited to assembling/packaging of SKD (semi-knocked down) kits.

This low level of local value addition is due to a weak manufacturing eco-system which in turn stems from limited capabilities across various stages of the manufacturing value chain.