As per the reports of 2019, the Indian smartphone market surpassed the USA market to become the second-largest in the world after China. But the data seems to alter in the coming months as the smartphone production in India is estimated to fall down to the level on which it was four years back.
Experts say that the primary cause of the downfall is that the companies have stopped their smartphone production due to the nationwide lockdown announced to curb the spread of COVI-19 in the country. So far many cases have been encountered and many deaths are witnessed by India caused due to COVID-19 and therefore the government had to take the step safeguarding lives of people. But this has caused a bounce back in the economy of the country.
India’s contribution to global smartphone production in 2019 was witnessed as 16%, which is quite higher than its contribution made in 2016 i,e, 9%. Experts consider the US-China trade war as one of the primary reasons for this hike in the smartphone production rate. But now the smartphone production in India is again expected to fall down to 9% (same as 2016) and uncertainty in the economy largely affecting the demand would be a major cause.
Factories that have halted the production do not have any spare capacity and might cover up for the lost exports by hiking the production. However, demand for smartphones in India is expected to decrease as compared to earlier years that might affect the total production.
The smartphone market started to fall in China after 2016 as some renowned smartphone manufacturers shifted their production units from the country. Firstly, Samsung Mobiles in 2019 closed all its production units from China and placed the establishments in India. Followed by Apple that is also gradually shifting its production from China to India in order to gain the tariff benefits under Make in India policy introduced by the government to boost the sector production.
The economy in China is stabilized as the pandemic (COVID -19) is under control in that country due to which the smartphone manufacturers in the country are scaling up with their production. Whereas, India is still on the verge of this pandemic due to which the entire country is in the state of lockdown this may lead to Rs. 15,000 Crore loss to the sector. Further, the sector must not expect any sudden hike in the demand and if the lockdown extends then India’s contribution to the global smartphone market shall be reversed in 2020.
Indian economy is unstable as compared to the economy of China as the nation (China) has already started to revive its economy and if the lockdown extends in India then there are no chances for companies to double their production in India. Well amidst the chaos, the relief to the sector is that Oppo Mobiles and Vivo are expected to increase their manufacturing capacity in India by 100 million and 50 million respectively. Apart from that, Xiaomi has declared the coming of its seventh manufacturing unit in India hiking by 60 million in India in 2020.