India needs to further woo top 5 mobile brands to beat China, says ICEA-EY report
According to a new report by the India Cellular and Electronics Association (ICEA) and consultancy major EY, the global mobile phone market is served mainly by five companies:
- Samsung
- Apple
- Huawei
- Oppo
- Vivo
As per the report, it is an opportune time for India to integrate itself into the global value chain by providing an assembly platform to these corporate firms. The South Asian nation has already managed to attract initial investments from all these five giants that command over 80% of the global mobile phone revenue.
At present, Indian companies such as Micromax, Lava are carrying out the production of mobile phones primarily to meet the needs of the domestic market. However, these companies have not yet plugged into global manufacturing in a significant manner. In order to plug into the global chain, India may ride on the distribution as well as the retail networks of these companies.
India doesn’t have in-house R&D, as per the report. Hence, global firms can bring in cutting-edge technology which may not only accelerate the production processes of global giants but also domestic companies. Also, India has to address a plethora of structural and governance issues, including the high cost of power, taxation rates, and ease of doing business that affects India’s competitive edge. These issues and disabilities must be resolved by the Indian government in the long-run.
Meanwhile, by providing WTO-compliant incentives, the government shall try to offset these disabilities in the short-run, as per the report. The report stated that India has tried to substitute cell phone imports in the last five years by imposing duties under the Phased Manufacturing Programme. But the plausible way is the path of exports only to increase the volumes.
The Indian economy seems to have all the required ingredients in place to boost mobile manufacturing and encourage exports. “The only piece that appears to be missing so far is the policy support to attract lead firms, incentivize production and unveil measures that provide cost competitiveness to the industry or help offset the disabilities suffered by Indian firms vis-a-vis Vietnam and China,” the report emphasized.