Lava Mobiles first company to shift base from China to India

Lava shifts base from China to India
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Pune, May 15, 2020: Lava International, a renowned domestic manufacturer of mobile phones, is leaving China and coming to India completely. Till now the company’s phones were made in China for the export market, but in the next six months, the entire production facility will be lifted from China and put in India. The company will also bring its design centre from China to India. The centre currently employs over 600 employees. About one-third of Lava production is exported to various markets including Southeast Asia, Africa, Mexico, Indonesia and West Asia.

 

This move of the company is very important and it was taken immediately after the new government scheme of Productivity Linked Incentives (PLI). In this scheme of the central government, 4-6% incentives are being provided to those domestic and foreign companies, who want to make India a base of mobile phone exports in the next five years. The central government is also working on a policy to encourage Chinese manufacturers to produce in India. China is being boycotted worldwide after the COVID-19.

 

Hari Om Rai, chairman and MD of Lava, said, “Earlier the cost of making phones in India was higher than in China. But now the gap has ended due to the government’s PLI scheme. We will transfer all our production from China to India for the export market in the next six months. The design centre will also be brought from China to India.

 

The company will manufacture its headsets in its own factories in India instead of manufacturing them in China. The company still takes 40 percent of its parts from Indian suppliers and this figure is expected to increase. Lava is also importing components from Japan and South Korea, so it is not dependent on China alone.

 

Rai stated that he has formulated a two-way policy in the export market. The company also sells its handsets under its own brand name and manufactures for other mobile companies. This decision of Lava came at a time when sources informed about the interaction between the government and the big global mobile companies including Apple.

 

He said that out of the total phones that Apple makes in a year, 7 percent of that can be made in India instead of China in the first year of PLI. This figure will be increased to 18 percent in the next four years. It is believed that if the PLI scheme works for global companies, it could help India achieve more than seven per cent of global mobile exports worth $ 369 billion by 2025. At present, this share is just 0.5 percent or $ 2 billion. Currently, China and Vietnam occupy 85 percent of the mobile market. But the government has set an ambitious target of exporting 110 billion dollars by 2025 from India under the National Electronics Policy.