India is one of the most interesting and high growth areas for Internet adoption in the world today, and much of this growth is being driven by smartphones. There are a few reasons for this, such as the relatively low cost of a smartphone compared with a laptop or desktop computer – from the cost of the device to the necessary infrastructure. India is very much a developing market for smartphones with much of the country having sporadic 2G GPRS or EDGE coverage at best, and the nation’s carriers working on rolling out both 3G HSPA and 4G LTE coverage. The Indian government have also recognized the high growth of technology and have set up a “Make In India” scheme designed to encourage investment into Indian factories, offering tax breaks for businesses producing and selling products from and into the domestic market. This policy has worked, with the Indian Telecom Minister Ravi Shankar announcing some of the fruits of these labors at the Global Business Summit.
In his speech, Ravi reported that Rs. 1.14 lakh crore has been invested into the Indian electronic manufacturing sector and there are fifteen new mobile plants. As a result of this investment, the production of cell ‘phones has increased from 2014’s 68 million to 100 million in 2015, as at the end of December 2015. Whilst this is a significant increase in numbers, the increase in terms of value of product manufactured is even more impressive: during the current financial year, the value of mobile ‘phone production has increased by 95%. Ravi also explained that there are many major companies now manufacturing in India, name dropping Panasonic, Mitsubishi, Nidec, Samsung, Bosch, Jabil, Flextronics and Continental. The investment into the sector has resulted in the creation of 30,000 new jobs and Internet use penetration has increased by one third, from 300 million to 400 million. Ravi also highlighted his support for the experimental new technologies being developed and piloted in India, such as Google’s Project Loon and Microsoft’s White space spectrum. He said: “Once the pilot becomes successful, then depending on security concerns, final call will be taken.” He also explained that the current government have increased fibre optic deployment by five hundred times compared with the previous government.
Although “Make In India” has been successful, many of the new factories are assembling devices rather than building the components in India. This helps streamline getting devices from the factory into the hands of Indian customers and is also widely seen as the start of the process of encouraging Indian businesses to set up their own component manufacturing plants. With Indian internet adoption set to continue to rise and the smartphone playing a crucial role in this, we may be seeing the first Indian System-on-Chips being manufactured locally in 2016.