India has a great opportunity to become a leader in Mobile and Mobile Accessories Exporter post the pandemic
By Akhilesh Chopra, Director Sales, Bluei
When we hear mobile accessories, the very first thing that comes to our mind is mobile phones. The mobile phone industry has positively seen an upward graph, both mobile phone and smartphone users in India have been vigorously increasing their exposure to the internet which will stay the consumption of mobile phone accessories high. Growing smartphone access further pushes the mobile accessories market in India. Due to the rising popularity of social media and internet, a rise in the penetration of smartphones is resulting in an increase in requirements for advanced mobile phone accessories.
This is how India has an extraordinary chance to set up itself as an alternative to the destination for mobile phone and accessories manufacturing and become a global exporter in worldwide at de-risking manufacturing from China in the post pandemic, a strategy report by ICEA-EY. The statement, which has been shared with government officials, has underlined a three-phase ‘Resume, Re-establish, and Resurgence‘ plan to help India achieve exports of USD 100 billion in mobile phones and accessory and nearly US 40 billion in components by 2025.
The report said India appears to have all the necessary ingredients to encourage mobile and mobile accessories manufacturing at scale and boost exports from the country but what appears to be missing is the policy support to draw leading firms, incentivise production, and unveil events that provide cost competitiveness to the industry or help offset the disabilities suffered by Indian firms vis-a-vis Vietnam and China.
It is likely that Indian users from different disabilities like the high cost of power, tax, and ease of doing business. This renders India almost 10 percent and 20 percent less competitive than Vietnam and China, respectively. India has to address these disability matters in the long run. In the short run, the government must endeavor to offset these disabilities by providing incentives that are WTO-compliant, simple to implement, and help India take off from the export runway. If we talk about only for mobile phones, India spent USD 18.7 billion on the import of mobile phones and parts, compared to exports of USD 2.0 billion of mobile phones and parts.
Major brands like Apple, Samsung, and Oppo which account for over 80 percent of mobile phone revenues globally are already present in India. While they have started assembly in India to mainly serve the domestic market. However, these companies are keen and capable to offer India with global market access. Some of these global companies have begun smartphone and mobile accessories exports from India since 2018.
The increase of COVID-19 and the subsequent lockdown of countries saw supply chains being disturbed, which has forced global firms to de-risk manufacturing out of China and spread across multiple countries, as against reliance on a single basis of production and procurement. Also, the present business difference between the America and China gave India a chance to plug itself as the third mobile accessories and phone assembler in the world.
The post pandemic period might thus present India an unprecedented opportunity to set up itself as an alternative destination for manufacturing to follow on the course of becoming a net exporter. India needs to move “deliberately” and approach companies and supply chains in a targeted manner and address their particular concerns with alacrity.
Homegrown companies need support in two areas to be able to capture a larger piece of the market. First, is skill-building, in terms of supply chain, manufacturing and design. And second is the ability to access the markets of the world. I think these two areas, if we can get support, ultimately we will be global champions and global champions from India are going to appear. The report suggested that before November 2020, the focus may be kept on restarting operations and reaching 100 percent capacity, and then till November, the country should aim to restore complete routine including supply chain, input imports, and normalise operations for both domestic supplies as well as export markets.
In the period from December 2020 to 2025, India needs to plan its course towards becoming a leading exporter of mobile phones and accessories in the world, while pushing mobile exports as a top-ranking Indian export from where it presently stands.