{"id":281731,"date":"2024-02-08T20:17:24","date_gmt":"2024-02-08T14:47:24","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=281731"},"modified":"2024-02-09T14:26:55","modified_gmt":"2024-02-09T08:56:55","slug":"indias-mobile-phone-industry-mobile-pli","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/indias-mobile-phone-industry-mobile-pli\/","title":{"rendered":"PLI Scheme to Manufacture India\u2019s Mobile Phone Industry"},"content":{"rendered":"

\"PLI<\/p>\n

Source<\/strong>: The post India’s mobile phone industry has been created, based on the article \u201cMobile PLI: Only the long-game matters<\/strong>\u201d published in \u201cBusiness standard<\/strong>\u201d on 8th February 2024.<\/p>\n

UPSC Syllabus Topic:<\/strong> GS paper 3 – economy-changes in industrial policy and their effects on industrial growth.<\/p>\n

News<\/strong>: This article discusses the growth of India’s mobile phone industry due to government policies like tax cuts and incentives. It covers the industry’s challenges, dependence on imports, and possible future scenarios, including developing local manufacturing and becoming a global player. PLI Scheme to Manufacture India\u2019s Mobile Phone Industry<\/strong><\/p>\n

What is the current state of India’s mobile phone industry?<\/strong><\/h2>\n
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  1. India’s mobile phone sector has grown significantly, with exports nearly doubling from $7.2 billion in 2022 to $14 billion in 2023.<\/li>\n
  2. One in four phones produced in India is now exported.<\/li>\n
  3. The government’s reduction of import tariffs on certain mobile phone components from 15% to 10% aims to further bolster this growth.<\/li>\n<\/ol>\n

    How have government policies impacted India’s mobile phone industry?<\/strong><\/h2>\n

    Three key government decisions have boosted the industry:<\/p>\n

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    1. A 20% import tax on mobile phones to reduce imports.<\/li>\n
    2. Lower import taxes on components, ranging from 0-10%, created tax arbitrage, attracting manufacturers to produce locally.<\/li>\n
    3. The introduction of the Production Linked Incentive (PLI) scheme, offering 4-6% cash incentives based on incremental production, further stimulated the industry.<\/li>\n<\/ol>\n

      What are the challenges in India’s mobile phone industry?<\/strong><\/h2>\n

      High Production but Low Investment:<\/strong> The industry has produced mobile phones valued at \u20b94.12 trillion with a relatively low investment of only \u20b97,400 crore. This indicates that for every rupee invested, \u20b955 is generated in production, suggesting a focus on assembly rather than comprehensive manufacturing.<\/p>\n

      Reliance on Incentives:<\/strong> There’s a concern about the industry’s reliance on government incentives like the PLI scheme. Many manufacturers might reduce or stop production once these incentives are withdrawn, indicating a lack of long-term sustainability.<\/p>\n

      Dependency on Imported Components: <\/strong>The industry heavily depends on importing high-end components, which is a significant vulnerability.<\/p>\n

      Past Instances of Disruption:<\/strong> Examples like Nokia, which faced major tax disputes and labor issues leading to the closure of its plant, show the potential for regulatory and labor challenges within the industry.<\/p>\n

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      Read More UPSC Topics-<\/strong><\/h2>\n\n\n\n\n
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