Made for India, made outside India?

Prime Minister Narendra Modi says Indian and foreign companies should set up manufacturing base in India. Thus, he came up with the "Make in India" programme last  year and has promised to make India an easier place to do business. Yet making India an easier place to do business alone will not be enough to boost manufacturing in India. Cost of manufacturing too needs to come down. India needs to become as competitive as China, if not more, for more manufacturing to happen in India.

The mobile phone industry exemplifies what's wrong with India as manufacturing base. India is one of the fastest growing market for mobile handsets, yet there is no local manufacturing. The lone plant set up by Nokia some years ago is yet to find a buyer since it was closed down.

Yet, it is brands that make for India that has a lion's share of the market. Micromax has emerged as the number one smartphone brand in India in October-December 2014 quarter, selling more devices than Samsung. The lead is small, but significant enough. Micromax accounted for 22 per cent of all smartphones sold during the quarter against 20 per cent for Samsung, according to estimates of Canalys, a UK-headquartered analyst firm.

In all about 21.6 million smartphones were sold during that quarter, and at 22 per cent, Micromax  sold close to 4.8 million devices against 4.3 million by Samsung. Other domestic brands Karbonn and Lava were at the third and fourth positions, and together these two brands would have sold a little under 4 million phones between October and December 2014.

Canalys attributes the popularity of the domestic brands to their ability to price the devices attractively and to cater to local preferences such a greater battery life and support Indian languages.  About 65 per cent of the smartphones sold during the quarter were priced below Rs 12,000 apiece, including 23 per cent priced below Rs 6,000.

Clearly, India is an aspiration-driven market and yet value-conscious. Now, none of these phones were manufactured in India. If not all, most were made in China by manufacturers to the specifications of the Indian handset vendors. India imported telecom instruments, read mobile handsets, worth $11 billion between April and December 2014, accounting for 3.2 per cent of all imports by value. More than 64 per cent of all telecom instruments by value were imported from China.

The question is: If China can make for India, can't India make for India?