Handset Makers To Invest Rs 650 Cr By March-End

by CXOtoday News Desk    Feb 25, 2016

investment

The government’s ‘Make in India’ and ‘Digital India’ initiatives are acting as gateways to spur growth of India’s tech and telecom industry. Mobile phone companies are likely to invest Rs 650 crore by March and production of handsets in value terms is expected to cross Rs 40,000 crore by the end of current fiscal.

In a written reply in the Lok Sabha, Telecom Minister Ravi Shankar Prasad said, “The total investment made by companies during the past 7-8 months are estimated to be in the range of Rs 250-300 crore which is likely to increase to Rs 600-650 crore by the end of 2015-16.”

“As per the Indian Cellular Associations, the production of mobile phones in India during current financial year is expected to cross Rs 40,000 crore compared to the production of Rs 18,900 crore during 2014-15,” Prasad told PTI.

He said over 30,000 new jobs have already been generated in this industry during the past 7-8 months and an additional 8,000-10,000 jobs are expected to be generated by the end of current fiscal.

“The differential duty for mobile handset manufacturing is being termed as a game changer by the industry and consequent to this various mobile phone manufacturing companies like Foxconn, Xiaomi, Micromax, Celkon and Karbonn have committed to mobile phone manufacturing in the country,” Prasad mentioned.

The minister mentioned the government is providing modified special incentive package scheme (M-SIPS) which provides financial incentives to offset disabilities that electronic manufacturing sector has been facing.

In an earlier report, Telecom Secretary J S Deepak informed the agency, as many as 50 new mobile phone factories were reportedly set up in the country during the past 10 months, creating employment for 20,000 people. This year, India produced 100 million smartphones as compared to 45 million last year with leading companies setting up their manufacturing base in the country.

“The number of phones being manufactured was 10 million sometime back (which increased) to 45 million last year and 100 million this year. The time has come when we will reach 500 million, may be in 2 years,”  he said, predicting that mobile phone manufacturing in the country may reach 500 million units in coming two years on the back of good base of talent and an incentive policy.

Read more: This Year, Smartphones To Overtake Feature Phones In India

Additionally, the Department of Electronics and IT has successfully funded Indian Conditional Access System (iCAS) which is available for use by domestic manufacturers at a price of $0.5 per licence for a period of three years compared to market price of USD 4-5 per licence.

Smartphones account for about a quarter of the more than 1 billion mobile phone accounts in India, the world’s second-biggest telecom services market by number of users. And that segment is growing the fastest, with new smartphone sales crossing 100 million for the first time last year, the official informed.