Thanks to the production-linked incentive scheme for mobile phones, India’s mobile imports decreased 33 per cent year- on-year in FY22, said the research report on mobile phones by credit rating firm CRISIL. According to the report, dependency on China reduced to 60 per cent from 64 per cent in FY21, and is expected to fall further in the medium term. With a rise in production, import of electronic components essential for mobile assembling/manufacturing also increased 27 per cent year-on-year.
Self-sufficient consumption
The CRISIL report noted that with the domestic output rising, India has become largely self-sufficient on the consumption front, even as mobile consumption increased by 15-20 per cent during FY22. Crisil estimates that Indian consumption will reach ₹3.5-lakh crore to ₹4-lakh crore in 2024, as the mobile life cycle reduces and financing options become more replete. However, the report also noted that the rising domestic output was unable to bolster India’s export position globally.
Due to the support of the PLI scheme, export of mobile phones increased by 56 per cent year-on-year, and are expected to touch 1-lakh crore to 1.2 lakh crore over fiscal 2023 and 2024. However despite of the significant gains in exports, CRISIL notes that India’s share in global exports continues to be minuscule, with China and Vietnam continuing to meet the bulk of global demand. “India’s exports largely comprise low-end mobile phones, priced below ₹10,000. But major markets, such as US, Hong Kong and Japan, import mobile phones priced upwards of ₹15,000 because of their high capita per income, which boosts affordability, and established 5G coverage which lags in India,” the report noted.
5G smartphone consumption poor
Furthermore, with 5G deployment just on the horizon, the share of 5G smartphones in India continues to be low due to the high price of the handset, according to the report. CRISIL noted that the sale of 5G smartphones constituted only 15-20 per cent of the overall handset sales in fiscal 2022. However, they predict that sales will pick up substantially in late 2023 due to the festive season. Overall, between 2017 and 2022, smartphone sales in India surged from 113 million handsets to 161 million; meanwhile, the shipment of feature phones declined to 88 million from 140 million during this period due to the proliferation of 4G services.
Published on
July 05, 2022
