India's Mobile Exports Hit $24 Billion as Domestic Value Addition Lags
Surging export volumes mask a reliance on imported components, leaving India as a primary assembly hub with low indigenous production.
India has witnessed a dramatic escalation in mobile phone exports over the last several years, yet the country struggles to capture significant value within its own borders. While the volume of shipments has soared, a heavy reliance on imported components has limited the economic impact of this manufacturing boom.
According to industry data, India's mobile phone exports grew from $0.2 billion in 2017-18 to $24.1 billion in 2024-25. However, this growth is largely driven by assembly processes rather than the creation of high-value parts. Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA), estimates that domestic value addition (DVA) in India’s mobile phone industry currently stands at only 18-20 per cent.
The Assembly Trap
This trend results from aggressive government incentives designed to attract global electronics brands to set up operations in India. While these policies successfully increased the number of devices leaving Indian ports, they fostered a "screwdriver manufacturing" model. In this system, components are manufactured abroad and shipped to India for final assembly, which requires relatively low technical expertise and provides fewer high-skilled jobs compared to full-scale component fabrication.
Consequently, India has seen a widening trade deficit in electronic components. The surge in exports is effectively offset by the need to import sophisticated circuitry, displays, and camera modules required to build the phones, preventing the country from achieving true industrial autonomy in the sector.
Global Standing and Implications
India's struggle with value addition is evident when compared to its global peers. Among major manufacturing economies, only Vietnam has a lower domestic value addition in the electronics sector than India. This positioning suggests that India is operating as a low-cost assembly hub for global brands rather than developing a robust, indigenous component ecosystem.
For the industry, this lag represents a strategic vulnerability. Without a domestic supply chain for critical components, India remains susceptible to global supply shocks and misses out on the highest-margin segments of the electronics value chain. Sustainable economic growth in this sector depends on moving beyond assembly to integrate "backwards" into the supply chain.
The Path Forward
To move up the value chain, India must now pivot its focus toward the production of high-value components locally. The next phase of industrial growth will likely depend on whether the government and private sector can incentivize the manufacture of printed circuit boards (PCBs) and other critical modules within the country.
Observers will be watching for new policy shifts that prioritize component-level manufacturing over final assembly. Until India can significantly raise its DVA percentage, its status as a global electronics powerhouse will remain limited to the final stage of the production line.