Report Reveals 23% Domestic Value Addition in Phone Assembly

Fast Summary

• A new study by Centre for Development Studies (CDS) challenges skeptical views on India’s mobile phone manufacturing industry, claiming domestic value addition is at 23%, higher then previously estimated.
• The report contests RBI Governor Raghuram Rajan’s assertion that India remains a net importer as most components for assembly are still imported.it argues that less than 25% of imported components are directly used in phone manufacturing.
• ₹4.1 lakh crore worth of finished mobile phones where manufactured in 2024 under Union government schemes like the Production linked Incentive scheme, though actual assembly accounts for only ~4% of a phone’s selling price.
• CDS Director C. Veeramani highlighted domestic value addition reaching more than $10 billion during FY22-23 and urged focus on scaling assembly operations rather than immediate localization of component production.
• The report calls for engagement with Chinese firms as crucial too India’s electronics manufacturing strategy while addressing recent issues regarding restricted capital and personnel movement from China to India.

Indian opinion Analysis

The CDS study provides new perspectives on India’s mobile phone manufacturing progress by emphasizing domestic value addition over dependency concerns raised earlier by critics like raghuram Rajan and Rohit Lamba. By asserting that imports constitute less component usage in the sector, the findings suggest stronger contributions to economic growth through assemblies within India than previously acknowledged.

This highlights an vital dialog regarding balancing global partnerships with self-reliance – particularly china’s role in enabling large-scale expansion within India’s electronics ecosystem amid geopolitical complexities. Prioritizing scalable assembly processes appears pragmatic given rising production figures but presents challenges over long-term localization aspirations rooted in broader “Make in India” goals.

India’s shift toward enduring self-sufficiency without isolating key trade relationships will likely shape future policies aimed at fostering competitiveness while expanding technology ecosystems within domestic industries-a critical step if any ripple effects could inform similar strategies across emerging sectors.

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