Made in India phones set to cross 50 crore by 2020, may give China a run for its money

Mobile phone manufacturing in India witnessed a significant surge in the last couple of years and number of devices produced in the country is expected to touch the 50 crore mark in a matter of three years from now.

"In 2014, we produced 6 crore mobile phones. In 2016-17, we produced 17.5 crore mobile phones and we are well on path to producing 50 crore mobile phones by 2019-20," IT Ministry Additional Secretary Ajay Kumar told Press Trust of India on Wednesday.

Kumar added that the value addition in these indigenously made phones has also grown significantly over the years. "It was 10 per cent or so and now, it is 20 per cent and hopefully by 2020, it will be 35 per cent or so."

If Indian phone makers are able to meet the growth expectations in the coming years, this might give a sturdy competition to the Chinese phone sellers in India. At present, Chinese phones have a bigger market share than the local phones in the country.  

 Bumpy road for domestic phone makers

Since, Prime Minister Narendra Modi introduced the "Make in India" project in 2015, the country is striving to become a manufacturing hub. The initiative aims to encourage national as well as multi-national companies to manufacture their products in the country.

However, India's smartphone makers have been distressed for the past few years-- as competitors from the foreign countries, especially from China are surging ahead.

Chinese mobile phone firms have taken a large chunk of the Indian market pie and have thrown a sturdy competition to the players in India.

Besides, the demonetisation drive last year proved a disaster for the Indian handset makers such as Intex, Micromax and Lava. As a result of poor sales between September and December last year, they were dropped from the list of top – five smartphone rankings for Q4 of 2016.

 Chinese phones like Vivo and Lenovo gained good market share during the period.

Very recently, top executives from the Indian smartphone vendors accused Chinese smartphone vendors of dumping low-cost smartphones in India and making it tough for the local business to survive. They insisted that the government should make a move to start anti-dumping duty on such phones.

Over the past two years, Indian smartphone makers have lost about 35 percent of the market to Chinese companies. Just, two years back, Indian companies like Micromax, Karbonn Mobiles and Lava including other domestic players had more than 54 percent market share, according to a research report by Counterpoint.

In the quarter that ended June this year, Chinese players crossed 50 percent of the market share for the first time in India since entering the nation.

Nevertheless, all these reports raise the question whether the government is doing enough to push India to become a manufacturing hub.

If India does become a manufacturing hub in the future, it will cut down the economy's dependence on foreign goods and as a result, domestic companies would be able to perform much better.