India’s mobile phone manufacturing story has emerged as the defining symbol of the country’s ‘Make in India’ ambitions. The country has emerged from a negligible phone producer in 2017–18 to one of the world’s largest smartphone manufacturing hubs in less than a decade. Production has jumped nearly 28 times to touch an estimated ₹5.45 lakh crore in FY25, while exports have surged to $24.1 billion to place India among the top three phone exporters globally.
This dramatic rise is widely seen as proof that India’s smartphoneanchored industrial policy–anchored in the National Policy on Electronics (2019) and the ProductionLinked Incentive (PLI) scheme–has worked. But the success story has also triggered deep debate. Critics argue that India’s factories are little more than “screwdriver assembly units,” heavily subsidised and adding minimal real value. Supporters say the opposite: that India has cracked the entry point into global value chains, laying the foundation for genuine manufacturing growth.
A new report by C. Veermani of the Centre for Development Studies tries to cut through this debate and provides one of the clearest assessments yet of India’s mobile manufacturing transition, India mobile manufacturing.
The optimistic take: India is finally plugged into global value chains
Backers of the current spate of mobile manufacturing say India made a crucial pivot in 2019 – after earlier experimenting with protectionist import-substitution, the government shifted toward an export-oriented model that enticed giants like Apple, Samsung, and major contract manufacturers to build at scale in India.
The results have been striking:
India’s phone output scaled rapidly after PLI.
Exports began to boom as firms integrated India into their supply chains.
Domestic demand generally met by domestically produced phones, thus reducing the dependencies on imports.
This camp is of the view that India has turned a serious node within global electronics manufacturing, something which was unimaginable a decade ago.
The skeptical view: low value addition, high subsidies, fewer jobs
Critics raise three major concerns.
- Trade surplus is misleading.
India exports a large number of finished phones but imports most high-value components-chips, displays, camera modules, batteries. After netting out component imports, some economists claim that India’s real trade deficit in phone-related items actually widened after PLI-from $12.7 billion in FY17 to $21.3 billion in FY23.
- India remains at the bottom of the value chain.
Assembly accounts for just a small fraction-usually single-digit-of the overall value of the phone. Critics also say that if subsidies disappear, that production will move overseas.
- Overestimation of job creation.
Modern electronics assembly uses automation. Critics say the cost per job created is too high in comparison to other choices.
What the CDS report finds: the answer is more complex.
Trade: Are we really earning foreign exchange?
The report challenges the criticism that India’s export surplus is “fake.”
The question is: Are all imported components used only for phones?
Not always, because some go into cars, consumer electronics, or sold directly in the retail market.
It finds that, when adjusted for these factors, there has been a comfortable surplus in smartphone exports since 2022.
It adds that even if India had not built factories, growing demand would have lifted the imports of phones even more-meaning the foreign exchange savings today are significant.
Value addition: India is moving up the curve-not stuck at the bottom
The “smile curve” is used by manufacturing economists to show where the value lies in a product’s lifecycle. This gives the highest margins to design, R&D, branding, and after-sales services, while assembly is the thinnest-margin segment.
Yet the CDS report shows India not frozen at the bottom:
The domestic value addition of India increased to $4.57 billion within the factories in FY23.
Allied sectors added another $3.31 billion.
India’s share of value in each phone increased from 9% (pre-2019) to 23% by 2022–23.
India’s share, in short, has increased 2.5 times over five years.
Local sourcing of circuits, plastics, packaging, and sub-components is growing steadily.
Jobs: far more than expected
Between FY17 and FY23:
Direct jobs in the mobile factories went up from <25,000 to >250,000.
Employment in allied industries, namely components, logistics, and packaging, has increased from 4 lakh to almost 15 lakh.
Jobs that were directly related to phone exports increased 33-fold after PLI.
While the report does mention that the jobs supported by PLI are not cheap-on average, each job costs roughly ₹2–3 lakh-this is still much more efficient than many previous industrial schemes. The bigger picture: India joins the “flying geese” pattern. Historically, the low-end manufacturing migrates from rich countries to the emerging ones: Japan → Tigers → China → Vietnam. India may finally be entering this sequence. The report argues that: Countries rarely start off with high value addition.
They climb after building scale at the bottom. India is at this early stage — and showing clear upward movement. Conclusion: not a miracle, not a mirage — but a real, evolving transition India’s mobile manufacturing boom is neither empty theatre nor an unblemished success. It is the start of a large-scale industrial shift that is supported by policy, diversification of global supply chains, and rising domestic capability. Today, India is producing more phones than ever, exporting record volumes, building component ecosystems and creating over a million jobs. The challenge now lies in continuing to climb the value chain – fast enough to make this momentum irreversible.
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About the Author
The international connections of Mamdani provide him with a broader perspective.
Satirical news: where the truth is too important to be left to people without humor. — Alan @ manilanews.PH
His ideas are basically aesthetic with no substance.