The growth momentum in mobile phone manufacturing will continue, with the country likely to produce handsets worth Rs 4-4.5 trillion between FY22-24, thanks to the industry-related incentive scheme. production (PLI), which is in its second year for most companies, according to the rating agency. Crisil said.
Due to the boom in local manufacturing, dependence on China has diminished while India’s share of global mobile phone exports, which is currently insignificant, is expected to increase in the coming years. , according to the report.
“With increasing domestic production, India has become largely self-sufficient on the consumption front. In FY 2022, the country saw a 15-20% increase in mobile consumption to Rs 2.5 trillion. A declining mobile lifecycle, increasing digitization and easy financing conditions were the main factors contributing to the growth,” Crisil said. He said the momentum is expected to continue this fiscal year and next, pushing consumption up to 3.5-4 trillion rupees by FY24.
According to the data, after registering a compound annual growth rate (CAGR) of 33% between FY16 and FY21, domestic mobile production is estimated to have increased by 24-26% in FY22. “Despite continued chip shortages, three of the world’s manufacturers met PLI production targets during the fiscal year,” the report said.
Crisil Research expects the momentum of production growth to continue, with a CAGR of 22-26% between FY22-24 to reach Rs 4-4.5 trillion in value. As a corollary, the country’s mobile imports decreased by 33% year-on-year in FY22.
“Dependency on China has been reduced to 60% from 64% in FY2021, and is expected to decline further over the medium term. However, as production increases, component imports essential electronics for mobile assembly/manufacturing also grew 27% YoY,” he said.
The past fiscal year has been significant for the country, with mobile exports jumping 56% year-on-year thanks to the support of the staged manufacturing program and the PLI. Exports are expected to increase further and touch Rs 1-1.2 trillion in FY23 and FY24, he said.