While government is pushing to make India hub for electronics manufacturing with ‘Make in India’ programme, a report has said that exports of mobile phones are estimated to crash to zero in 2015.
“Mobile market grows by 32 percent or to $12 billion in 2014 but imports take over to occupy three quarters of market. Domestic productions fell by 29 percent. Exports may crash to zero in 2015,” according to the report, submitted by industry body Indian Cellular Association with the government.
Exports of mobile phone have been declining after touching a peak of Rs 12,000 crore in 2012. The export crashed by 70 percent from Rs 11,850 crore in 2013 to Rs 2,450 crore in 2014 and further estimated to be nil next year in absence of corrective measures, the report said. The report mentioned shut down of Nokia’s mobile phone plant in Tamil Nadu due to tax dispute with government during the year as a factor in decline of exports. India’s electronic mobile market is dominated by imports and mobile phone exports provided some cushion in burgeoning trade deficit. In 2013-14, government faced trade deficit of over Rs 49,041 crore in telecom segment. “Export of electronics is almost negligible. The only sector which has reasonable manufacturing and export was mobile sector. In fact, during 2008-2012 production was nearly matching India’s demand by volume,” ICA said.
At the same time import of mobile handsets in the country is continuously rising. In 2015, when export from India is estimated to be zero, import of mobile phones may be worth Rs 75,750 crore. The mobile phone import has increased from Rs 34,600 crore in 2012 to Rs 58,550 crore in 2014. When contacted, ICA National President Pankaj Mohindroo said, “It is extremely unfortunate that the torch bearer of India’s IT and telecom exports has been snuffed out. We are, however, confident that with the resolve of our Prime Minister to establish India as a global manufacturing hub, this situation will be reversed.” ICA suggested series of measures including 10-year tax holidays and tweaking of some other taxes to promote mobile manufacturing to achieve 25 percent share in global mobile manufacturing by 2019.
“This can translate into additional jobs creation of more than 1.3 million people to yield an annual industry turnover of Rs 1.5- 3 lakh crore. The imports can dwindle to just 10 per cent of the market as compared to over 60 percent now,” ICA said.