India has been envisioned by its government officials to become a hotbed for smartphone manufacturing. Attempts came in fits and start a few years ago and it has been struggling to make it consistent. According to industry executives, India remains stuck in a bottleneck for a couple of reasons.
In 2014, since Prime Minister Narendra Modi came to power, the Indian government launched the Make in India campaign to strengthen the slow-moving economic growth and create millions of jobs.
Since then, India became one of the world's fastest-growing smartphone markets. Looking back into its vision, the country has managed only to assemble phones from imported components. Apple's part supplier Foxconn Technology Co and Flextronics Corp have established hubs in India, but none of the high-end chipsets, camera and other premium parts are made domestically.
Speaking to Reuters, a senior executive of a Chinese smartphone manufacturer who requested anonymity says, India is not the ideal place to make mobile phones, rather it is the right place to import parts and assemble them due to "lower duty". He adds that lack of skilled labour and part suppliers are also a major setback in this campaign.
Complicated tax policies also keep foreign brands away from India. Another source tells the news agency that the country's nationwide sales tax is rippled with holes in it, including the protracted tax-refund process that defers payments to suppliers.
Nokia's tax dispute with India is one of the most publicised examples of this debacle, even prompting the company to halt its mobile handset production in the country.