Rahul Gandhi keeps talking about making mobile phones in India, Modi government is already walking the talk

As we have already observed, Rahul Gandhi is obsessed with mobile phones. Not a single rally goes where he does not talk about phones. In every rally, he says that at present mobiles phones we buy India are made in China and hence he dreams of seeing mobile phones made in the place where he is speaking. Perhaps he is laying the groundwork so he can later claim credit for increased manufacturing of cell phones if he comes to power. After all, the Prince will have to say something to substantiate his ‘achievements’.

While it has become a source of great amusement on social media, actually there is nothing wrong with promising a mobile phone making factory, or any factory, in an area. That’s the kind of promises politicians make before elections. But there is a big problem with the assumption that Rahul Gandhi makes while talking about mobile phones. He assumes that currently no phones are made in India and all phones come from China only.

Which is absolutely not true. Although China remains the global manufacturing hub of mobile phones, India has started to catch up in this sector. Giving a fillip to the Indian government’s Make in India initiative, several phone manufacturers have either set up their own manufacturing plants or have entered into pacts with other companies to manufacture their phones in India. Let us have a look at some of them.

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iPhone

This iconic phone that kickstarted that smartphone category is now manufactured, or rather assembled, in India. Apple has entered into an agreement with Taiwanese contract manufacturer Wistron to make the phone, and the production has already begun. Wistron has set up a plant in Bengaluru where they started by assembling the iPhone SE and later started making the 6s model also. The plant is being scaled up to manufacture more models of the phone.

Samsung

In July this year, Korean giant and global leader in mobile phone sales Samsung opened the world’s largest mobile phone factory, in Noida, UP. Samsung was already making phones in India, and after an investment of around ₹5,000 crore, they expanded the plant to double the capacity. Now the company will be making 120 million phones per year in India, up from 68 million earlier. Samsung is not just assembling parts imported from other countries, they are in fact populating the Printed Circuit Boards (PCB) for the phones in India itself. Samsung makes all models under the smartphone portfolio of the company, including the flagship Galaxy S9, S9+ and Galaxy Note8, in its Indian plant.

Xiaomi

Xiaomi, considered the Apple of China, has not one, not two, but as many as six plants to meet the growing demand for their phones. All the smartphone plants of the company have been set up in partnership with Foxconn, the Taiwanese contract manufacturing giant. The company had built its first plant in 2015 in Sri City, Andhra Pradesh, while its second plant came up in the same location in 2017. The company opened its third plant in Noida in 2017 in partnership with Hipad Technology. Initially set up for manufacturing power banks only, later this plant started making smartphones also.

In April this year, the company started three more phone manufacturing factories, located in Sri City in Andhra Pradesh and Sriperumbudur in Tamil Nadu. Along with these, the company also has set up an SMT (Surface Mount Technology) plant for making PCBs in Sriperumbudur. According to the company, they now make two phones per second in its six phone plants. These plants along with Foxconn now employ more than 10,000 people, more than 95 per cent being females. More than 90 per cent of Xiaomi phones sold in India is made in India.

Almost all companies that sell mobile phones India have set up manufacturing bases in the country. Vivo has its plant in Greater Noida, while Oppo has set up two plants in Noida. Huawei has set up a plant at Sriperumbudur in Tamil Nadu in collaboration with global electronic manufacturer Flex Ltd. All Indian phone makers like Micromax, Karbonn, Lava, Intex, iBall etc have set up manufacturing units in the country. Premium phone maker OnePlus gets their phones assembled by Oppo in India.

source: Counterpoint Research

These are just a few examples of phone manufacturing plants in India. In the year 2014, there were just two mobile phone manufacturing units in India, by the year 2017, India has become home to 123 factories making mobile phones.

As per a report by the Indian Cellular Association (ICA), India is now the second largest manufacturer of smartphones in the world. According to data provided by ICA, 11 million units of phones were made in India in the year 2017.

India is also the world’s second-largest smartphone market, which no phone maker can ignore. As India is an extremely price conscious market, companies are preferring to make their phones for the Indian market in India only, as they can save on import duty and international shipping costs, which help in keeping prices low.

Although so many phones are made in India now, most of them are actually assembled here using parts imported from abroad. But that would change, as India establishes itself as a major manufacturing hub for phones, companies will also start moving component making to India. In fact, that process has already started, Samsung and Xiaomi have around 60 per cent share in the smartphone market, and both companies have started PCB manufacturing in the country.

Made in India

And while India manufactures lots of mobile phones now, contrary to what Rahul Gandhi believes, we still can’t answer some of his other questions about phones. Like, why the Indian government does not buy mobile phones from Bharat Heavy Electricals Limited (BHEL), or when Hindustan Aeronautics Limited (HAL) will start making phones.

Unfortunately for Rahul Gandhi, phones manufactured in various Indian places don’t carry the tag like ‘Made in Noida’ or ‘Made in Sri City’ etc, they all say and will say ‘Made in India’.


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