The Production-Linked Incentive (PLI) scheme has had a profound impact on India’s mobile phone sector, significantly boosting domestic production and exports over the past decade. However, the India Cellular & Electronics Association (ICEA) is now seeking further incentives to sustain and enhance this growth.
Growth in Mobile Phone Production and Decline in Imports
As per the data shared by ICEA, from 2014 to 2024, India’s mobile phone production has seen a dramatic increase. In 2014-15, production was valued at Rs 18,900 crore, which surged to Rs 4,20,000 crore by 2023-24. This growth trajectory highlights the effectiveness of the PLI scheme, particularly since its implementation in 2020-21.
Mobile phone production over the years:
2014-15: Rs 18,900 crore
2015-16: Rs 54,000 crore
2016-17: Rs 90,000 crore
2017-18: Rs 1,32,000 crore
2018-19: Rs 1,81,000 crore
2019-20: Rs 2,14,000 crore
2020-21 (PLI year): Rs 2,20,000 crore
2021-22: Rs 2,75,000 crore
2022-23: Rs 3,50,000 crore
2023-24: Rs 4,20,000 crore
Simultaneously, mobile phone imports as a percentage of the total market value have significantly decreased from 78 per cent in 2014-15 to just 3 per cent in 2023-24. The PLI scheme has played a crucial role in reducing import dependency.
Growth in Mobile Phone Exports
The PLI scheme has also catalysed a remarkable increase in mobile phone exports. From a mere Rs 1,477 crore in 2015-16, exports soared to Rs 1,29,000 crore in 2023-24.
Mobile phone export figures over the years:
2015-16: Rs 1,477 crore
2016-17: Rs 1,149 crore
2017-18: Rs 1,367 crore
2018-19: Rs 11,396 crore
2019-20: Rs 27,225 crore
2020-21 (PLI year): Rs 22,685 crore
2021-22: Rs 45,000 crore
2022-23: Rs 90,000 crore
2023-24: Rs 1,29,000 crore
Demands for Further Growth
Despite these successes, the domestic market is slowing down, making export growth crucial for sustaining the industry. The ICEA is now advocating for additional incentives to promote local manufacturing of components used in mobile phone production. They are seeking Rs 40,000-Rs 45,000 crore in direct financial incentives or through an extension of the PLI scheme, spread over seven or eight years.
“The financial support package of Rs 40,000-Rs 45,000 crore has been recommended to the ministry. It will be spread over seven or eight years and meant for components and sub-assemblies. It can run parallel to the mobile PLI scheme which will have a sunset date [by March 2026],” said Pankaj Mohindroo, Chairman of ICEA.
ICEA, representing major players like Apple, Xiaomi, Oppo, and Vivo, among others, emphasises that while high tariffs have benefited mobile phone production, they have not been as effective for components or value addition. Therefore, targeted incentives are necessary to build a competitive components ecosystem in India.
As the Union Budget 2024-25 approaches, the industry’s call for a comprehensive financial support package is likely to be a critical consideration for the finance ministry, aiming to sustain the momentum of growth in India’s electronics manufacturing sector.