Made-in-India global mobile brand ambition faces challenges of scale, R&D

India's push to create a homegrown global mobile phone brand will require applicants to overcome challenges in R&D, scale, software, branding, distribution and cost competitiveness

The government’s move to establish an Indian mobile phone brand under the aegis of the ₹62,500 crore Mobile Phone Manufacturing Scheme comes at an important juncture as the country looks to increase its importance in the global supply chain, according to experts.

 

Currently, the government is in talks with three domestic firms who have been tasked with drawing up project plans for the India-made phone that has both Indian intellectual property as well as original design.

 

The names of these Indian companies have not yet been made public officially. The applicants seeking to build the next Indian smartphone brand, however, face an uphill task and will have to overcome several challenges, the experts said.

 

For example, one of the biggest challenges for the applicants will be creating a complete ecosystem of proprietary software, technology roadmap, quality control, post-sales service, branding, and distribution, said  Ashok Chandak, president of industry body India Electronics and Semiconductor Association (IESA).

 

Applicant companies will also need to ensure they remain cost-competitive with the final product they launch under this scheme, Chandak said.

 

“Mobile phones are still price-sensitive items, except a few brands that people will pay for because of the brand value. That is one. The second challenge is technology cycle because these phones have to come up with improved features and functions on a regular basis. So, the R&D (research and development) function also becomes important,” he said.

 

Though the earlier schemes such as the Production Linked Incentive (PLI) as well as the first phase of the India Semiconductor Mission created scale, attracted global investments, expanded exports and established a strong manufacturing foundation, the new MPMS scheme will strengthen large-scale mobile phone manufacturing and the component ecosystem, supporting India’s ambition to secure 35 per cent of global mobile phone production, Pankaj Mohindroo, the chairman of industry body India Cellular and Electronics Association, said.

 

“The government has already made a serious effort by approving 106 projects under the ECMS (electronics components manufacturing scheme) and rolling out ISM 2.0. Applicants that get to make the Indian brand will have to leverage these domestic capabilities to remain competitive, because if they continue importing, the price shoots up,” Chandak said.

 

A third challenge will be to scale up production and achieve the successes the country achieved in the first phase of the mobile phone PLI, experts said. For example, between 2014-15 and 2025-16, domestic mobile phone production increased 33 times, while overall mobile phone exports increased 165 times, Prashant Singhal, leader (telecom, clients and industries) at EY India said.

 

“The success of the scheme is dependent on a robust implementation roadmap with seamless coordination among all stakeholders,” he said.