Make In India: Government announces special fund to boost local manufacturing of mobile phones

The government is looking at ways to transform India into a manufacturing hub for mobile phones and electronic components similar to Vietnam and China.

Published:Mon, February 03, 2020 1:09pm

By Staff


Make in India is set to get a major boost with the introduction of a special fund. During the announcement of Budget 2020, the government announced new measures to strengthen local manufacturing of mobile devices and components. Now, the government is going a step further to promote local manufacturing of mobile devices. It is also focusing on local manufacture of electronic components and semiconductor packaging. The scheme is said to help job creation in the country.

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The Economic Times reported earlier that the government was working on a Rs 36,000 crore fund. The fund is meant to provide production-linked incentives to smartphone makers. The government has been looking for ways to bring its electronic manufacturing efforts in the same realm as that of Vietnam and China. With the trade war complicating China's role in electronics manufacturing, India wants to be the clear alternative. This special fund is now seen as a way for the sector primarily focused on mobile phones and high value addition components.


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The new report from the ET states that this will create a necessary momentum to build the $190 billion mobile phone industry. Pankaj Mohindroo, chairman of the India Cellular & Electronics Association (ICEA) notes that this will also aid in exports of $110 billion. The export target was envisaged in the National Policy on Electronics 2019. The policy, back then, targeted manufacture of 100 crore mobile handsets in the country by 2025. This was valued at about Rs 13 lakh crore. Out of this, around 60 crore units were set for exports valued at about Rs 7 lakh crore.

The report further notes that the value of electronic equipment manufactured in the country has increased to Rs 4.58 lakh crore in 2018-19. It was Rs 1.90 lakh crore in 2014-15. "Electronics manufacturing industry is very competitive, and India has shown its cost advantages. The potential of this industry in job creation is immense," Nirmala Sitharaman, Finance Minister said in her Budget speech. However, the industry has met the decision with caution. Some industry watchers have noted that the government needs to build an ecosystem before expansion of local manufacturing efforts.


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