Assessing the Impact of the Mobile Manufacturing Sector on Indian Economy

Abstract

Indian mobile phone manufacturing sector has performed tremendously during the last few years. Currently India is the second biggest mobile phone market in the world. The total number of mobile manufacturing units in India has increased to 268 in 2019 from just 2 in 2014. Together these units employ 6.7 lakh people. The mobile phone sale in India has shown a compounded annual growth rate of 6.66 percent and 6.54 percent, respectively, for volume and value between 2007 and 2018. During 2018 the average monthly sale of mobile phones was 10 million. There were around 75 brands and 3,400 models of mobile handsets in Indian market during 2019. India now accounts for 11 percent of global mobile production, which was only 3 percent in 2014. The mobile manufacturing sector has achieved this success in a very short span of time. Hence, it is important to examine the factors that led to the phenomenal success of the sector. Second, what is the impact of this success to the Indian economy? These are the two prime objectives the current article attempts to explore. The study finds Indian policy initiatives, digital India campaign among a few others have contributed immensely to the growth of the sector. Analyzing the factors like domestic sale and export of mobile handsets, FDI received and employment generated for the period between 2014 and 2019 the study finds a positive impact created by this sector to the Indian economy.