Investments of up to Rs 15,000 crore likely in phone manufacturing in next 2 years


New Delhi: India can expect investments worth Rs 10,000-15,000 crore in the handset manufacturing space in the next two years due to the government’s latest incentive policy aimed at weaning away multinationals producing smartphones from China, according to industry body ICEA.

US contract manufacturer Flex, among the largest in the world, said the industry must identify the low-hanging fruits, which can be brought to India in the near term.

“The three areas in the ESDM sector which can be brought to India in two years’ time are PCBAs (printed circuit board assembly), display and the energy source (or battery packs),” said Arijit Sen, director at Flex. “These three things constitute 50%-55% of BoM (bill of materials) in majority of electronic products.”

Flex India runs three factories in India, which manufacture smartphones for Xiaomi and Motorola, and laptops for Lenovo.

TechArch also expects components such as PCBAs, camera modules, vibrator rings, speech sensors and speakers can be locally sourced, contributing to 35% of value addition to a smartphone. Apart from this, accessories such as chargers, data cables and earphones would be on high priority.

Sen, however, called on India to scrutinize and revisit some free trade agreements (FTA), which allow zero duty export to India, a route which some brands use to bypass import duties.

“The threat that comes is a far more insidious one. There are other countries which are pumping and routing their products through Vietnam for example,” Sen said in a webinar on Tuesday hosted by the industry body ASSOCHAM.

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