Production of mobile phones in India has taken a leap after the government introduced the Phased Manufacturing Programme (PMP) and the Production Linked Incentive (PLI) scheme, reducing the country’s imports and dependency on China.
After logging a 33% compound annual growth rate (CAGR) between fiscals 2016 and 2021, domestic mobile production is estimated to have grown 24-26% in fiscal 2022. Despite the ongoing chip shortage, three of the global manufacturers met PLI production targets during the fiscal.
CRISIL Research expects the growth momentum in production to sustain, with a 22-26% CAGR between fiscals 2022 and 2024 to Rs 4.0-4.5 lakh crore in value terms. The growth will be led by the PLI scheme, which is in the second year for most players.
As a corollary, the country’s mobile imports decreased ~33% on-year in fiscal 2022. Dependency on China reduced to 60% from 64% in fiscal 2021, and is expected to fall further in the medium term. However, with rising production, imports of electronic components essential for mobile assembling/manufacturing also increased 27% on-year.