India's Domestic Value Addition in Phone Assembly Surpasses Expectations at 23%, New Report Reveals

A new report by the Centre for Development Studies claims that India's mobile phone manufacturing has a domestic value addition of 23%, higher than previously estimated. The report disputes the notion that phone assembly is a trade surplus, as imports of components are not exclusively used for phone manufacturing. The report recommends focusing on scaling assembly operations in the medium term rather than pressing firms to procure components from local sources.

Title: India's Mobile Phone Manufacturing: A New Era of Domestic Value Addition

A new report by the Centre for Development Studies (CDS) reveals that India's mobile phone manufacturing sector has achieved a remarkable milestone in domestic value addition. The report, released on July 23, 2025, indicates that the sector's domestic value addition (DVA) has reached 23%, a significant increase from previous estimates. This figure, which includes both direct and indirect contributions from local manufacturers and suppliers, signals a deepening of the ecosystem within the mobile phone manufacturing sector.

The report disputes the notion that phone assembly is a trade surplus, noting that imports of components are not exclusively used for phone manufacturing. Instead, the report recommends focusing on scaling assembly operations in the medium term rather than pressing firms to procure components from local sources. This strategic shift aligns with India's goal of becoming a global leader in electronics manufacturing.

The CDS report attributes this transformation to a series of policy interventions and strategic integration into global value chains (GVCs). The Production Linked Incentive (PLI) scheme, launched in 2020, has been a pivotal factor in this growth. The scheme has encouraged large-scale electronics manufacturing and exports, leading to a significant increase in domestic value addition and job creation.

According to the report, India's mobile phone exports surged from USD 0.2 billion in 2017-18 to USD 24.1 billion in 2024-25, representing a nearly 11,950% increase. This dramatic shift highlights the sector's potential for growth and its role in driving India's economic development.

The report also emphasizes the importance of maintaining an outward-oriented industrial strategy and addressing tariff and trade distortions that hinder competitiveness. It suggests that policymakers should prioritize scale over premature localization to keep costs low and output high. Additionally, the report recommends improving logistics infrastructure, attracting foreign direct investment, and building a robust supporting ecosystem to sustain this momentum.

In conclusion, India's mobile phone manufacturing sector has achieved significant milestones in domestic value addition and job creation. The CDS report provides valuable insights into the sector's growth trajectory and offers strategic recommendations for policymakers to ensure sustained success. As global demand for electronics continues to rise, India's mobile manufacturing success story could serve as a template for other sectors, positioning the country as a global production powerhouse.

References:
[1] https://m.economictimes.com/industry/cons-products/electronics/india-becomes-worlds-3rd-largest-mobile-exporter-at-20-5-billion-study/articleshow/122856768.cms
[2] https://www.tribuneindia.com/news/business/india-can-replicate-success-of-mobile-manufacturing-in-electronics-sector-cds-report/
[3] https://www.business-standard.com/industry/news/mobile-phone-exports-soar-to-2-trillion-up-127-times-in-10-years-govt-125072301576_1.html