Smartphones mean big business in India

Credit: Reuters Studio
Published on October 25, 2018 - Duration: 02:03s

Smartphones mean big business in India

India’s booming mobile communications industry could soon rival China's as big brands move into the country.

Reuters has taken a look around the factories that are looking to do what China does, cheaper.

Michelle Hennessy reports.

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Smartphones mean big business in India

India's taking on China to be the world's next smartphone-making powerhouse.

Big names in the market like Samsung, and even China's Xiaomi are all driving cash into the country and bringing manufacturers like Foxconn with them.

India's domestic market is deep and its workforce is cheap - while China's labor costs are on the rise.

And that's already helped India pull ahead to world number two mobile phone maker.

Reuters correspondent Sankalp Phartiyal has been visiting factories, trying to make phones just like their Chinese rivals but with a more attractive price tag.

(SOUNDBITE) (English) REUTERS CORRESPONDENT SANKALP PHARTIYAL: "I'm standing in the factory of homegrown mobile phone maker Lava international on the outskirts of capital New Delhi.

Here they make smartphones that are sold domestically and also exported.

Specifically on this floor they mount components onto a printed circuit board.

This is a printed circuit board and it looks like this after components are mounted onto it.

This makes up nearly 50% of the cost of a smartphone." Smartphones are one of Prime Minister Modi's few success stories.

His promise to create tens of millions of jobs as part of a so-called Make in India drive has stuttered on more than one front.

And in the run up to a general election next year, smartphone manufacturing could help him stave off critics.

India's also set to benefit, from its main competitors' fallout with the U.S. (SOUNDBITE) (English) REUTERS CORRESPONDENT SANKALP PHARTIYAL: "A trade war is going on between the United States and China as we speak.

This could actually help India smartphone manufacturing ambitions as a lot of global smartphone makers are setting up factories in India to assemble phones and sell them in the country as well as export them." India has more than a billion wireless subscribers, and hundreds of millions of them don't yet have a smartphone.

Those numbers successfully wooed mobile brands to the country.

But the next step may be a bigger challenge: To go global, it needs to look beyond its own borders.

And big companies want business-friendly laws, not India's historically protectionist regulation.

That may be a high hurdle for Modi - as election day creeps nearer.

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