Over 150 Handset Manufacturing Units Set up in India in 4 Years: Report

Smartphone Imports Fall, Exports Rise as Local Production Ramps Up

Government data showed that the local production of smartphones is edging closer to normalcy with exports recovering to pre-Covid levels and imports falling by around half from June highs.

Government data showed that the local production of smartphones is edging closer to normalcy with exports recovering to pre-Covid levels and imports falling by around half from June highs.

As per data released by the Ministry of Commerce (MoC), smartphone exports in the month of August 2020 stood at Rs 1781.1 crore (US$ 242.04 million) by value, higher than March’s Rs 976.3 crore (US$ 132.67 million). Imports stood at Rs 1050.1 crore (US$ 142.70 million), higher than March’s Rs 13.4 crore (US$ 1.82 million).

The trend in imports, has been decreasing since June 2020 when the number hit a three year high of Rs 2225.2 crore (US$ 302.39 million). In fact, comparison on an annual basis with previous year’s festive season showed that imports of smartphones to India have aligned with the usual trend.

MoC data showed that the August 2019 recorded device imports of Rs 1984.7 crore (US$ 269.71 million) by value, like current figures.

Analysts stated that the local production in the industry has ramped up to 80-85% capacity which is optimal given the current demand. Imports for August continue to be high due to delay in stocking up of inventory for the festive season.

Mr Prachir Singh, research analyst at Counterpoint stated, “he worst is behind the smartphone manufacturing industry after facing a month-long shutdown, spread of Covid, customs scrutiny and labour shortage. Everything led to almost a quarter’s delay in building up festive season inventory when brands launch close to 30-40 models every year.”

He added that both demand and supply situations are falling back on track and thus the import is expected to continue falling as brands ramp up capacity further.

Pre-covid, 95% of the devices sold in India were assembled locally. To meet the increasing demand for smartphones beginning May-June when the economy started opening post lockdown, most handset companies had to import completely-built up units from China, given the limitations on local production owing to Covid rules.

As per various industry estimates, September 2020 sales of smartphones are expected to be >15 million, at par with previous year’s sales. For the whole year, 2020 sales are estimated to be at 130-135 million against 154 million in 2019.


Source: IBEF