Production of mobile phones decline in India

While the interim budget did propose to make mobile phones slightly cheaper, the production of phones in India is witnessing a huge decline. Phone manufacturers are outsourcing manufacturing to countries like Vietnam and Taiwan, while the Indian phone brands depend heavily on China. According to the Indian Cellular Association, number of phones produced in India dropped from 180 million in 2012 to just 125 million units last year, Hindu Business Line reports. The exports were affected too, displaying a decline of 59 percent. 

The main reason behind the alarming situation, as mentioned by ICA, is the unfavorable policy by government, which has not just hampered the production and exports but also does not do anything to attract component makers. As we all know, Nokia was slapped a tax notice, after which it shifted some of the manufacturing duties from its largest plant globally in Chennai to other plants outside India. Same goes for component makers, who don’t find the conditions lucrative enough yet to set up their own facilities in the country.

Lack of component makers in India, and with policies that phone makers don’t find feasible enough, things certainly don’t look great.