The Internet and Mobile Association of India (IAMAI) has called for a continued support for the nascent mobile component manufacturing sector that is most likely to spur its growth as well as integrate India into global supply chains.
The production-linked package (PLI) of Rs 42,000 crore, planning to offer a benefit of 4-6% on
incremental production for a period of five years can create an incremental production of $110
billion worth of mobile phones and their parts, generate exports of $78 billion and create 0.2
million fresh jobs.
A report by IAMAI titled ‘Production Linked Incentive for Smartphone Component Makers’ finds, that additionally, India should continue to focus on increasing production of specific nascent stage industry verticals and processes in the country which are high growth accelerators, require sticky large investments, are highly profitable in double digits, have a high-value addition on BOM, and are fungible across sectors. To that end, IAMAI has identified smartphone chargers and Printed Circuit Board Assembly (PCBA) as two mobile components that could help India to achieve its manufacturing targets if provided the right boost in addition to the PLI scheme.
The report also stresses the need to provide continued support for the smartphone chargers
manufacturing and PCBA operations. India has a high potential of becoming the leading global
exporter of chargers, and shift in the PCBA operations to India, if these two are given continued
support.
The report shows that with providing continued support for chargers manufacturing, as per the
industry inputs, India has a high potential of becoming the leading global exporter of smartphone chargers, currently comprising 50% of the overall global market. The global market for chargers in 2025 is estimated to be $10 billion with smart chargers comprising around 70% of the market.
The Indian export of all chargers (HS85044030) has risen from $143.05 million in 2016-17 to
$366.78 million in 2019-20 (April-December) with an estimated CAGR of 40% for last 3 years.
Looking ahead, with a 5% PLI, overall production of smartphone chargers in India can touch 6.5
billion with exports comprising $4.7 billion.
The report also states that once the PCBA-related capabilities have been developed and PCB
production is established in one geography, the inertia is very high. Thus, the PCB and PCBA
industry is highly fragmented, with bulk of the manufacturers based out of Japan, Taiwan, South
Korea, United States and China. Of these, China accounted for 48.01% of the global output volume of PCB and PCBA in 2017. In order to counter this inertia, and shift the PCB manufacturing to India, India should continue to incentivise PCBA at 5%, as it can increase PCBA production to over $3 billion for the large-scale export-centric manufacturers in the country.
These two verticals with the continued support can work as an attractive segment for attracting
investments, creating 25000 new jobs and reduce the import bill by increased local value
addition.
