India becoming magnet for smartphone manufacturing; Rs 90,000 crore investment proposals received for electronics manufacturing

The Prime Minister's Make in India campaign is visibly attracting a huge number of companies to start investing for setting up manufacturing units in India. In a recent briefing with the press, Ajay Kumar, Additional Secretary in Ministry of Communications, said that while India was already the fastest-growing smartphone market; it is now also becoming the fastest growing manufacturing destination of phones in the world.

Ajay Kumar said that the Government has received investment proposals of Rs 90,000 crore investment in the last 2 months for electronics manufacturing in the country. Already proposals which are approximately about Rs 1.10 lakh crore have been received in the last one year from different companies for electronics manufacturing under the Modified Special Incentive Package Scheme.

Lenovo has announced that it will start the local manufacturing of smartphones in Sriperambudur, Chennai. For the current financial year, Lenovo and Motorola will generate a capacity of 6 million units. The Moto E has already started rolling out from the plant and the K3 note will follow very soon.

Chinese smartphone player, Xiaomi has also announced its first manufacturing unit in Sri City in Andhra Pradesh. Additionally, one of the biggest players in the contract electronics manufacturing space, Foxconn, which is well known for producing Apple’s iPhones, recently signed an agreement with the government of Maharashtra for investing $5 billion over the next 5 years for setting up a new electronics manufacturing facility.

According to CyberMedia Research, 24.8% of smartphones shipped in the country during the AMJ Quarter of 2015, were manufactured locally, up from 19.9% in the previous quarter. Other global players such as Airbus, Samsung, LG, Flextronics and Thomson have also shown interest to start manufacturing in India.

The Department of Electronics and IT believes that the demand for electronics in India will reach $400 billion by 2020, and the sector has the potential to provide jobs to 28 million people and attract $100 billion investment.