India-Made Smartphone Share Jumps to 24.8 Percent in Q2: Study

Government's 'Make in India' initiative seems to have begun bearing fruits as 24.8 percent of the smartphones shipped in the country during the June quarter were made locally compared with 19.9 percent in preceding quarter, a report said on Wednesday.

According to the research firm CyberMedia Research, a total of 56.6 million handsets were shipped during the June quarter, of which smartphones comprised 43 percent (24.8 million units) of the volume.

Smartphone shipments in the country grew 24.8 percent to 24.41 million units in the June quarter, with Korean handset maker Samsung continuing to hold the numero uno position in the Indian market.

"The 'Make in India' campaign has had a positive impact on mobile handsets manufacturing in the country. Of the total handsets shipped in Q2 CY2015, 24.8 percent were manufactured and/ or assembled in India compared to 19.9 percent in the previous quarter (Q1 CY 2015)," it said.

Government has been pushing for promoting manufacturing in the country, especially electronics. A significant volume of mobile handsets sold in India are manufactured in China and Taiwan and estimates suggest that given the strong growth seen in the Indian market, import bills for electronics could be higher than that of crude oil by 2020.

While players like Samsung, Micromax and Spice have been assembling handsets in the country, firm like HTC, Asus and Gionee have evinced interest in setting up a manufacturing base in the country. In the past few weeks, Xiaomi and Motorola, along with Lenovo have commenced assembly of smartphones in India.

While CMR calls this a "positive development", it also said the strong position enjoyed by Chinese brands (China OEMs and brands) in the smartphones category is a growing concern.

The contribution of Chinese brands grew 97 percent year-on-year (YoY) during the June quarter as against 48 percent for Indian brands within the smartphone segment, it said.

"Such influence and acceptance of Chinese brands poses a challenge to emerging as well as incumbent Indian brands of smartphones," it added.

Expressing his concern, CMR Lead Analyst Telecoms Practice Faisal Kawoosa said: "Although domestic manufacturing of mobile phones has increased, the government must introduce minimum value addition norms for mobile handsets as a threshold for qualifying to be labelled as 'Made in India'."

This will push the industry to devise ways and techniques to increase the value of domestic contribution across the value chain, he added.