In recent times, India has been trying to provide backing to smartphone makers in the country and ramp up the exports numbers.
Apparently this push is already paying dividends.
The numbers released by the Ministry of Commerce (MoC) are encouraging. Smartphone exports in the month of August totalled Rs 1781.1 crore by value, higher than March's Rs 976.3 crore.
The imports, however, were pegged at Rs 1050.1 crore, in contrast to the measly Rs 13.4 crore in March.
The good news though here is imports, as a trend, are coming down since June when the number hit a three year high of Rs 2225.2 crore. For instance, August last year recorded device imports of Rs 1984.7 crore by value.
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Local production up
One of the reasons why the exports numbers are going up is the local production has gotten back to stream. Due to the Covid-19 and the resultant economic lockdown, manufacturing had been greatly hit. But since August, companies are slowly getting back on their feet.
Reports have it that the "production in the industry has ramped up to 80-85% capacity which is optimal given the current demand."
Imports for August showed a high number because the phone-makers were building up inventory for the festive season sale. But now that the manufacturing here has improved, September import figures are expected to plunge.
According to a report in Economic Times, "Pre-covid, 95% of the devices sold in India were assembled locally. But, for catering to high pent-up demand for smartphones beginning May-June when the economy started opening up, most handset companies had to import completely-built up units from China, given the limitations on local production owing to Covid rules."
Most phone manufacturers here are planning to get back to the pre-Covid levels and cut down on the imports.
"Eventually, the aim is to again go back to the same level as earlier, maybe even to a higher level. Of course, we keep facing challenges because sometime in some factory, there will be some COVID-19 patient and then shut down the line, sanitize. But despite all of those things, things have scaled up significantly," Manu Jain, Managing Director, Xiaomi India was recently quoted as saying.
Apple, Samsung lead the charge
Main players like Apple and Samsung are also ramping up their operations here.
The much-talked about PLI scheme, which aims to make India a manufacturing hub for smartphones, was notified in April. And that seems to be working.
Apple’s contract manufacturers started producing its latest handset models, the iPhone 11 and iPhone SE, shortly after that in India. The scheme is aimed at attracting manufacturers looking to move out of China amid Sino-US trade tensions, and even looks to draw companies from other manufacturing hubs.
If Apple is already in the process of making India its major production hub, its arch rival Samsung Electronics is well on the course with a move that could see them shifting out all production from Vietnam and South Korea to India.
Samsung is contemplating a plan that would make India its production hub and devices worth $40 billion are planned to be manufactured here over the next five years.
