India’s electronics story has reached the stage where both cheerleaders and cynics need new material. The cheerleaders can no longer pretend that nothing has changed: phone production and exports have grown dramatically, global suppliers operate larger Indian footprints and contract manufacturers are acquiring genuine capability. The cynics can no longer end every discussion with the phrase screwdriver assembly as if repetition were analysis.
Yet the central criticism remains valid. A phone can be assembled in India while most of its valuable design, software, chips, display technology, camera modules, patents and branding are owned elsewhere. The Union Cabinet’s Mobile Phone Manufacturing Scheme explicitly aims to deepen domestic value addition and support Indian brands. The Indian Express’s explanation correctly identifies the unfinished tasks: sustaining large-scale production and capturing more of the value now retained abroad.
I support the government’s direction. Industrial ecosystems do not spring fully formed from a policy seminar. Assembly creates scale, employment, quality systems and supplier demand. The mistake would be to declare the journey complete because export cartons now say India on them.
Assembly was a beginning, not a fraud
Critics often speak as though assembling a complex consumer device requires no capability. That is wrong. High-volume manufacturing demands process discipline, yield management, logistics, testing and coordination across suppliers. Plants train workers and managers. Customers impose standards. Local firms learn how global production networks operate.
East Asian manufacturing powers did not begin by owning every layer. They climbed through supplier relationships, accumulated know-how and invested in increasingly sophisticated components and design. India is attempting a version of that climb in a more competitive era, when incumbents possess enormous scale and technology cycles move quickly.
The government deserves credit for creating policy continuity around mobile manufacturing. Incentives, infrastructure and market access have altered corporate decisions. But incentive success should be measured by capability that remains after the incentive declines. A factory dependent indefinitely on payments for incremental sales is a subsidised location, not yet an autonomous ecosystem.
Policy therefore needs milestones beyond unit volume. How much local value is added? Which components are produced competitively? How many Indian engineers work on product design? What patents or process technologies are owned here? Are local suppliers winning business without a mandate? These questions are harder than counting finished devices, which is why they matter.
Why Chinese brands still dominate the shelf
Indian consumers did not choose Chinese brands because they failed a patriotism test. They chose aggressively priced phones with features they wanted, extensive retail distribution, financing, quick product cycles and expanding service networks. Chinese companies combined supply-chain scale with sharp understanding of the Indian market.
An Indian brand cannot defeat that advantage by printing a flag on the box. It needs sustained software support, quality control, camera tuning, inventory planning and after-sales service. It must survive low-margin competition without treating customers as a captive constituency. National sentiment may earn consideration; it will not excuse a weak modem or a missing security patch.
Chinese supply chains also remain important even when a non-Chinese brand assembles in India. Components, tooling and subassemblies frequently cross borders. Decoupling is therefore not a switch. India should diversify dependency, build strategic capability and maintain commercial realism. A policy framed as instant independence will generate either disappointment or creative accounting.
Domestic brands require patient capital. Hardware is unforgiving: inventory loses value quickly, defects become expensive and marketing battles consume cash. Government support should favour demonstrable design and research rather than merely protecting a local logo attached to imported reference designs.
Components are where the difficult work begins
Displays, semiconductors, camera systems, batteries, printed circuit boards and precision mechanical parts involve different economics and technical barriers. No country must make every item, but India needs depth in enough layers to avoid being a final assembly point vulnerable to external disruption.
Component policy should be selective. Chasing self-sufficiency in everything can waste public money and produce expensive inputs downstream. The state should identify areas where Indian demand, engineering skill or material access creates a plausible advantage. Power electronics, packaging, battery systems, design services and certain subassemblies may offer stronger paths than attempting to duplicate every established factory abroad.
Supplier development is crucial. Large anchor firms can transfer standards and create demand, but smaller Indian suppliers need credit, testing facilities and predictable certification. Delayed payments can destroy a capable small manufacturer long before a policy review notices. Industrial strategy is often won through mundane contract enforcement rather than summit photographs.
Skills policy must also move past counting jobs. Assembly employment matters, particularly for women entering formal manufacturing. The next phase requires technicians, toolmakers, quality engineers, materials specialists and product designers. Training institutions should be evaluated by placement and competence, not seats sanctioned.
Transparency will make the policy stronger
Incentive schemes spend public money and should publish recipient-level outcomes consistent with commercial confidentiality. Citizens need to know which targets were met, how domestic value was calculated and whether jobs persisted. Without transparency, success is narrated by the beneficiary and failure disappears into an extension request.
Definitions matter. Made in India, assembled in India and designed in India describe different achievements. Marketing should not blur them. Clear labels would allow consumers to reward deeper local value if they wish and would pressure companies to improve.
The government should also prepare for disputes. As local-content requirements deepen, firms may restructure invoices or route components creatively. Verification capacity must grow alongside incentives. A policy that cannot audit its central metric will eventually reward paperwork over production.
None of this justifies Congress-style dismissal of manufacturing policy as corporate favour. India neglected labour-intensive and electronics manufacturing for too long, while celebrating services as though a vast country could employ everyone through coding and consultancy. The current government at least recognises that factory ecosystems are strategic. My criticism is intended to make that strategy more durable, not to return to complacency.
Success is bargaining power
Technological sovereignty does not mean isolation. It means possessing enough capability, suppliers, knowledge and market power to make choices. India can import advanced components while negotiating from strength if it also contributes valuable design, production and demand.
The new scheme is therefore a reasonable bet, but its legacy will be determined in the layers beneath the finished phone. If Indian firms learn to design products, own patents, manufacture competitive components and build trusted brands, assembly incentives will have served as a ladder. If imports are merely unpacked one stage earlier while subsidy claims grow, the ladder will lead to a platform painted to resemble progress.
I am cautiously optimistic because the base now exists. Exports and production have changed the conversation from whether India can participate to how much value it can retain. That is genuine progress. It is also exactly the moment when policy must become less impressed with volume.
Chinese brands dominate because they built ecosystems, not because Indian consumers lack loyalty. India’s answer must be another ecosystem—open, competitive, audited and capable of creating products people choose without being asked to perform citizenship at the checkout counter.
