Indian smartphone maker Lava plans to shift production to India

The move is thanks to the government’s new production linked incentive (PLI) scheme for mobile manufacturers in the country. Industry executives say that it gives manufacturers here a 6% cost advantage, something they didn’t have earlier. According to the company, the “cost disadvantage” Lava had as compared to China is eliminated by the PLI scheme.

“We have been eagerly looking forward to an opportunity to shift our entire mobile R&D, design and manufacturing from China to India. With the production linked incentives, our manufacturing disabilities for the world market would largely be met hence we plan to make this shift,” said Hari Om Rai, chairman and managing director of Lava.

Since the proliferation of Chinese smartphones in the Indian market, companies like Lava, Micromax, Karbonn, among others, had found themselves at a disadvantage. However, Lava is among the few Indian players who had been able to move into other countries and sell phones there. The company also moved most of its business towards the manufacturing and design side of things.

The company had also benefited from the recent US-China trade war, gaining a sudden influx of business last year. Reports suggest that US telcos AT&T, T-Mobile and Sprint had handed orders worth approximately Rs. 2,500 crore to companies like Lava and Micromax, thanks to rising tensions between the two countries.

India has often been cited as a viable alternative to China, though countries like Vietnam remain in contention too. At the moment, companies bring semi knocked down (SKD) units into the country and assemble them here, whereas companies are now expected to move towards component manufacturing here, so that completely knocked down (CKD) units can be brought into India.

Recent reports also suggest that iPhone giant Apple is planning to move much of its manufacturing to India in the next five years. The company is expected to export smartphones up to $40 billion from the country, after moving about a fifth of its production here.

—Livemint