Rajan used false figures, questionable analysis, and advice of unidentified “industry experts” for his research paper, news agency IANS quoted the minister as saying.
Rajan’s paper titled ‘Has India really become a mobile manufacturing giant?’ had raised concerns about the the PLI scheme, accompanied by questions over India’s rising mobile phone exports.
Rajan argued that value addition is low in the smartphone PLI scheme as it is basically only about assembling, and not deep manufacturing. Besides, imports exceed exports, he said. Not even the smallest parts of mobile phones are being made in India, he pointed out.
In response, a LinkedIn post by Chandrasekhar said that the research paper is “built on the false premise that all key electronics imports are only for the purposes of mobile production”.
“This is the first lie. Mobile production utilises only part of the total key imports of $32.4 billion. Every other conclusion that follows is consequently flawed. The imports linked to mobile phone manufacturing are merely $22 billion out of the total $32.4 billion – only 65 per cent is used for total mobile manufacturing,” the minister said.Therefore, the net foreign exchange outflow on account of mobile phone manufacturing for FY2023 is $10.9 billion, and not $23.1 billion, Chandrasekhar argued.Rajan exaggerated the foreign exchange outflow by more than 110 per cent, the minister said. This he did to “purely to mislead readers, sensationalise the trade deficit, and put down the PLI Scheme as a failure,” he added.
Chandrasekhar also contested Rajan’s statement that all mobile phones produced in India are a result of PLI. “This is also wrong. Of the total mobile phone production of $44 billion, only $10 billion or 22 per cent was eligible for PLI incentive in 2023,” the minister pointed out.
Challenging Rajan’s position that not even the smallest parts of mobile phones are manufactured locally, Chandrasekhar called this comment “complete intellectual bankruptcy and lack of understanding of electronics manufacturing in general, and smartphones in particular”.
The minister pointed out that it is not just India that can’t make semiconductors, which are the smallest parts of any smartphone and one of the most complex technologies. Even electronics powerhouses China and Vietnam are not making semiconductors yet, he said.
Such projects take time and require a massive effort, and the government is doing exactly that — building domestic capacity, reducing dependence on China, and increasing value addition, the minister added.
India has seen a huge 1,400 per cent jump in mobile production under Modi govt (from $3 billion in 2014 to $44 billion in 2023), Chandrasekhar said.
Large companies like the Tatas have started not just making components but will soon be manufacturing iPhones in India, he said. This will provide an opportunity for Indian SMEs be part of the global supply chain, he added.
