Budget 2023: Phone manufacturers are adopting PLI for component production

Industry Outlook Team | Wednesday, 18 January 2023

Indian smartphone market will either experience low single-digit growth or a second year of sales declines in 2023. Analysts predict that telecoms and smartphone makers would cooperate to promote the conversion of feature phones to smartphones in order to increase sales.

Important factors
The adoption of 5G networks
• To increase average selling prices
• Bolster the industry's ongoing premiumization of handsets, It's likely that a robust upgrade market will emerge, increasing revenues.

An increase in homegrown manufacturing
• India's component manufacturing is anticipated to increase
• Fostering domestic manufacturing
• Demand can increase as local phones become more affordable.

Issues and concerns:
• Lull in demand in high volume budget segment
• Supply chain disruptions in China
• Increased government scrutiny on smartphone brands

Key Requests
• Duty rationalisation for premium mobile devices, parts, and subassemblies.
• Extend the SPECS programme for five years at a budget of Rs 10,000 crores.
• A PLI programme for the production of components

"We anticipate positive action to support a thriving local component supply chain ecosystem with the upcoming budget. In turn, this will assist India in becoming self-sufficient and provide it the necessary momentum to become a trillion-dollar digital economy "President of Xiaomi India, Muralikrishnan B.