A Reuters report highlighted the growth potential in smartphone manufacturing in India and how phone makers are cutting cost.
Lava, which does not feature in top 5 smartphone companies in India, builds its own devices at two factories in Noida, on the outskirts of New Delhi. Lava factory employs about 3,500 people. Earlier, Lava used to import phones from China.

Global smartphone companies including Samsung, Oppo and Xiaomi are expanding in India. They will be starting to bring components suppliers to India, while driving contract manufacturers like Foxconn to enhance manufacturing facilities.

More than 120 manufacturing units have created 450,000 jobs in the mobile phone industry over the past four years, according to the Indian Cellular and Electronics Association.

That growth has made India the world’s second-biggest mobile phone maker and positioned it for growth as trade tensions and rising costs hobble China’s electronics manufacturing sector.

“India has an opportunity to become a major player in the global supply chain because we have a very strong domestic economy,” Vikas Agarwal, India head of Chinese smartphone maker OnePlus, said.

The country still needs to encourage the production of high-value components as well as research and development.

Sanjeev Agarwal, Lava’s head of manufacturing, says local production is helping it reduce costs and build high-quality devices that can sell for less than $150.

Lava says it does much of the company’s product design in China. Lava plans to bring that work to India over the next few years. The local presence allows quicker innovation, as well as lower, tariff-free costs.

Samsung opened the world’s biggest mobile phone plant in Noida. The South Korean giant last year said it will spend 49.2 billion rupees or $672.45 million to expand manufacturing capacity at the Noida plant over three years.

China’s Oppo, one of India’s top smartphone players, is building a massive plant in Noida — aiming to open shortly.

India has more than a billion wireless subscribers, and about 380 million of them do not yet have a smartphone.

India’s manufacturing plan includes import duties not only on phones, but also on accessories such as phone chargers, batteries and headphones, as well as components including pre-assembled printed circuit boards.

Xiaomi, which competes with Samsung for the top spot in India’s smartphone market, makes many of its smartphones using Foxconn’s plants in southern India, with a total of six facilities producing its devices.

Xiaomi said this year that it wants its component suppliers to set up shop in India too, a move that could bring as much as $2.5 billion of investment and create as many as 50,000 jobs.

Xiaomi supplier Holitech Technology has committed to investing about $200 million in India over three years in India, with plans to begin manufacturing in early 2019. It will make components such as camera and touch screen modules and fingerprint sensors, said Muralikrishnan B, Xiaomi’s chief operating officer for India.

Samsung said it plans to use its Noida plant as an export hub, but it is unclear whether other manufacturers will follow suit.

Xiaomi’s Muralikrishnan said bringing the entire electronics manufacturing ecosystem to India would be a big challenge.

Apple assembles two low-cost models through Wistron in Bengaluru. But with little domestic demand for its high-end phones, the company has resisted government pressure to move more of its work from China.