India is rapidly progressing towards complete self-sufficiency in mobile phone manufacturing by this fiscal year, with Apple and Google now producing their high-end models locally. This shift has substantially reduced the need for imports, showcasing the success of India's production-linked incentive scheme. The industry is witnessing a surge in local production, with major players like Samsung, Google, and Apple setting up manufacturing operations in the country. This growth trajectory signals a promising future for India as a competitive hub for electronics exports.
India is on track to achieve complete self-sufficiency in mobile phone production by the end of this fiscal year, buoyed by major developments in the industry. Notably, Apple has commenced manufacturing its iPhone Pro and Pro Max models in the country, while Alphabet's Google has also begun producing its Pixel handsets locally.
The shift towards local production, even of premium handsets, has led to a substantial decrease in the need for imports, according to officials familiar with the matter. "With Apple's recent announcement of manufacturing the iPhone 16 Pro and Pro Max models in India, we are witnessing the final strides that underscore the success of the smartphone production-linked incentive (PLI) scheme," revealed an official who preferred to remain anonymous.
Until the previous fiscal year, imports accounted for nearly 3% of the total value of smartphones sold in the domestic market, primarily comprising the Pro models of iPhones and Google's Pixel devices. Notably, Samsung, from South Korea, has already transitioned to manufacturing all its devices within India. Officials further disclosed that in terms of volume, a staggering 99% of mobile phones are now being produced locally, with the remaining 1% set to be supplied by domestic manufacturers in the near future.
To combat the grey market for high-end phones, the government took a significant step in the FY25 budget by reducing customs duty on smartphone imports. Following this move, Apple promptly lowered the prices of iPhones across its entire lineup in India by 3-4%, passing on the benefits of reduced taxes to consumers. Additionally, Apple announced its plans to initiate local production of the iPhone Pro and Pro Max models, marking a departure from its traditional pricing strategies.
The Indian smartphone market has been flourishing, reaching $33 billion in the fiscal year 2023, with import values totaling $1.4 billion, around 4.2% of the market. By the subsequent fiscal year, smartphone sales surged to $37 billion, with imports amounting to $930 million, approximately 2.5% of the market. Import volumes now contribute to less than 1% of the total market share. Alongside Samsung, Google, and Apple, Chinese tech giants like Oppo, Vivo, Xiaomi, Realme, Transsion Holdings, as well as Indian brands such as Lava and Micromax, have also established manufacturing operations in India.
Pankaj Mohindroo, the chairman of the India Cellular and Electronics Association (ICEA), expressed optimism about the industry's future trajectory. "While achieving 100% domestic manufacturing is a significant milestone, our ambitions do not end here. We are setting our sights on a $500 billion electronics production target... Our goal is to elevate India into a highly competitive manufacturing hub for electronics exports on a global scale," Mohindroo affirmed.
According to ICEA projections, the Indian market is poised to continue offering a range of Pro models following the launch of new generations. The local production of Pro models translates into substantial savings for customers, with an estimated reduction of ₹15,000 per device on the latest models. Market analysts point out that the iPhone 16 Pro, for instance, is priced at ₹119,900 compared to ₹134,900 for the iPhone 15 Pro. Recently, Google also unveiled plans for local manufacturing of Pixel smartphones, with a specific focus on the Pixel 8 series, aligning with Samsung's existing practice of producing all its devices within India.
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