When we can Expect “100% Make in India” Smartphones?

These days, social media is flooded with posts urging to buy made in India smartphones and ban Chinese products and brands due to Coronavirus pandemic. Especially in case of smartphones, many people are requesting to buy from non-Chinese brands like Apple, Samsung, or Nokia. And Ban Chinese brands like Oppo, Vivo, Realme, Xiaomi, OnePlus, Huawei, etc.

But there is one question. Do we really have 100% made in India Smartphones? When we can expect to have these made in India Smartphones? Of course, most smartphone brands sell their devices with “Make in India” sticker on their boxes. These are actually assembled in India, not Made in India smartphones.

First of all, let’s find out what happened with Indian smartphone brands?
There was the time when Indian brands like Micromax had bigger market share than Samsung. Currently, there are only a few market players in India, namely Samsung, Xiaomi and Realme.

Usually, Indian brands simply imported most of the parts to assemble their phones in India or they just order smartphones from China in bulk. Then they rebranded the same with their logo and sold in India by charging higher price. Simply put, the parts and design are Chinese but branded as Indian. In 2014, Micromax had 18% market share and was second largest smartphone maker in India. Today, it’s share has shrunk to only 2% in India.

A few years back, the business was simple for smartphone brands. They ordered Chinese smartphones at low price in bulk, sold them and kept the margin themselves. Later on, plenty of Chinese brands entered India like Oppo, Vivo, and Xiaomi. They started selling budget smartphones with promising specs. Eventually, Micromax, Lava, Intex and other Indian smartphone brands started losing share. At the end, China gets the benefit, whether Indian brands import parts or handsets.

Why Made in India Smartphones?

Indian brands like Karbonn, Micromax, Lava etc. earned profits with old business model. Now, most of them are either struggling hard to survive or shut down. Chinese brands have now become the ruler and selling same devices at cheaper rates. It’s like eliminating the middleman. These days, phones are assembled in India and parts like display, body, CPU, etc. are imported from Taiwan and China.

The reason is simple. If a company imports a completely assembled phone from other country, they need to pay 12.5% as import duty. On the other side, they can get tax benefits from the government and pay just 1% as tax if they start a plant in Special Economic Zone (SEZ) for assembly.

This is the reason why most Chinese brands have come up with their assembly plants in India as Make in India campaign, such as Oppo, Vivo, and Xiaomi. For smartphone assembly in India, Vivo has set up a plant in Greater Noida.

In fact, Samsung and iPhone devices are not completely made in India. Samsung phones are assembled in Noida-based plant while iPhone SE in Bangalore. Many parts are still imported from other countries.

To be precise, let’s break down which are Chinese smartphone brands and which are not –

First of all, Chinese companies in India –

• Xiaomi – As you know, it is Chinese brand but significantly became India’s largest smartphone brand.
• Realme
• Oppo
• Vivo
• OnePlus
• iQoo – Recently made an entry with a 5G flagship smartphone.
• Huawei

Non-Chinese brands that you can consider when buying a new smartphone –

• Apple – based in US
• Google – based in US
• Sony – a Japanese brand
• Samsung – the South Korean tech giant
• Asus and HTC – Taiwanese smartphone makers
• Nokia – Finnish mobile brand recently bought by another Finnish company, HMD Global around a few years ago. But, all Nokia phones are now made by a Taiwanese company, Foxconn. In fact, Foxconn manufactures phones from Apple with manufacturing plants located in India, China, Brazil and other nations.

One thing you should keep in mind that some Chinese companies like Vivo and Oppo have employed thousands of Indian workers in their assembly line. Recently, Realme has announced that they are going to hire around 10,000 workers from India at their manufacturing units located in India.

What about 100% made in India phones?
Actually, assembling phones in India is not bad for economy. Actually, it is generating employment for people. But at the end, components are still imported from other countries. There is still lack of manufacturing plants for display, motherboard, processors, camera, RAM and others in India.

In addition, MediaTek and Qualcomm processors are not made in India. If a company wants to setup a plant for India-made processor, they have to invest a lot. In addition, mineral elements will also be required to manufacture the parts of motherboard. It may not be available in ample supplies.

There is also a huge need for R&D for manufacturing semiconductors, which is currently happening only in Taiwan and China. A lot of other parts like camera, display, and RAM are imported from other countries. If you think you can buy 100% made in India phone, think again.

So, what do we have now?

According to a recent report, around 37 smartphone companies have been establishing their manufacturing plants in our country, which will bring over 1.65 lakh jobs directly and indirectly. Of course, Make in India has been successful in India but we still have to go a long way.

From importing devices from China, we’ve finally moved to assembling them in our country. In fact, import duty has also been raised on electronics. So, it is not practical to have completely in-house manufacturing overnight.

Of course, “Make in India” is a positive step and it will take time to progress. It will attract more industries as India already has tough competition in mobile markets.

Update – PM Modi has addressed the country for “being vocal to local” on May 12, 2020 to boost local manufacturing. He urged citizens to support start-ups, companies, and manufacturing based in India.

There is a strong need for leading Indian companies to build Made in India smartphones to compete directly with Chinese brands. Global investment should also come up from leading tech giants who can manufacture processors, displays and other vital components that can give a great support for local production.

Recently, Apple has announced that around 20% of manufacturing of their iPhone devices will be moved to India from China. It seems to be a positive sign for India. It will inspire more brands to move their focus to India.

The Takeaway

At the end, we are going to conclude that Indian start-ups and companies should work hard and make every possible step to compete with global rivals by offering best services and products at competitive rates to buyers in India.

On the other side, as Indian citizens, we should have strong faith in Indian brands and we have to fully support them to compete with foreign companies.

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