India targets to takeover Vietnam to become global mobile manufacturing hub

The government of India announced three new schemes to boost the electronic manufacturing industry in India. The three schemes, Production Linked Incentive (PIL), Scheme for Promotion of Electronic Components and Semiconductors (SPECS) and the Modified Electronics Manufacturing Cluster Scheme (EMC 2.0), are aimed at bringing the global value chains in India while raising the national champions. Now, the Indian Cellular and Electronics Association (ICEA) has developed a comprehensive roadmap that aims to utilise these schemes in order to make India the top global mobile manufacturer.

In the report titled “Mobile Manufacturing in a post-COVID-19 World”, ICEA details a three-staged plan to kickstart and capture the global mobile manufacturing market, especially at a time when US-China trade tensions have had the companies derisk the manufacturing process and look for alternatives that won’t be affected by the trade tensions.

“The recently announced trilogy of schemes – PLI, SPECS and EMC 2.0 – have laid the foundation for starting something big. It fulfils the Hon’ble Prime Minister’s vision for making India a global hub for manufacturing. The impact of the PLI scheme will be visible before the end of FY’2020-21” Pankaj Mohindroo Chairman, ICEA, said in a statement.

The plan, as mentioned before, has three stages -- Restart, which includes launching incentivised schemes for the mobile manufacturing sector, restarting manufacturing, retail and export facilities; Restore, which includes implementing PLI and bringing the manufacturing capacity back to 100%, and Resurgence, which includes attracting global investors and making India the leading mobile manufacturing and exporting hub.

The focus, as ICEA, explained in the report is to bring global value chains to India, establishing Indian champions and replacing Vietnam in the global mobile manufacturing market that is currently dominated by China and Vietnam. Together the two countries capture nearly 85% of the global export market.

The report says that labour arbitrage coupled with global market access, presence of global brands and technology, investment in global value chains, a fostering ecosystem that is created by the recently launched schemes by MeiTY is what is required to make India a global player in the mobile manufacturing area.

The industry body has a bunch of recommendations to make India a mobile manufacturing hub. These include manufacturing capacity to hit 100% post the Covid-19 lockdown, successful implementation of PLI, creating a conducive policy environment under SEZs to enable fast paced electronics manufacturing relocation to India, revisiting India’s taxation policies, using PLI to develop other schemes and states and centre addressing disabilities beyond PLI.

“The mobile manufacturing and components sector is ready to lead India’s post COVID-19 exit strategy. Production has restarted. We hope to hit 100% production by August. As the PLI scheme kicks in, we plan to ramp up global exports from India. There isn’t a moment left to waste”, the ICEA chairman added.