The smartphone ecosystem in India will get a big boost with Chennai-based Munoth Industries planning to set up India’s first Lithium-ion cell manufacturing plant in Andhra Pradesh’s Tirupati by next year. With an investment of Rs 799 crore, the first phase of the project will be ready by 2019 and the second and third phases by 2022. The company said the plant will create employment opportunities for 1,700 people. This is the first of its kind Lithium-ion cell unit in India, which will kickstart mobile component manufacturing in India.
“We have been working on the project for almost two years,” Vikas Munoth, Director, Munoth Industries Limited, told Indianexpress.com on the sidelines of the announcement. “Today, India manufacturers close to 25 crore phones and almost 25 crore batteries are being imported only for mobile phones. This is why we thought of setting up a dedicated unit for Lithium-ion cells,” he said. Munoth Industries has partnered with China’s Better Power Company for the technology to manufacture Lithium-ion cells in India.
In the first phase, the company has pumped in Rs 165 crore, in which it would get a capital investment of Rs 25 crore from the Central Government. The Andhra Pradesh government will provide fiscal and operational incentives, like subsidies on interest and power costs. “Without ‘Make in India’ support this industry is not viable which is probably why India has not seen any Lithium-ion factories so far,” Munoth added.
Lithium-ion cell is the essential component in smartphone batteries. At the moment, these Lithium-ion cells are being imported from outside of India, whereas battery packs are assembled here in the country. Once the plant gets operational next year, the company targets to sell Lithium-ion cells to mobile phone manufacturers and battery pack manufacturers in India. As of now, India has 42 mobile phone factories and 12 battery pack manufacturing units. The Indian Cellular Association (ICA) estimates that India is expected to produce a total of 1.5 billion phones by 2025.
“Battery contributes to almost 3-5 per cent of the BOM cost of the phone and cell contributes to major part of the cost,” explained Tarun Pathak, Associate Director with Counterpoint Technology Market Research. “Hence, localisation can increase value addition for handsets which is a good signal for the overall ecosystem of component manufacturing.
Introduced in 2014, ‘Make in India’ is Prime Minister Narendra Modi’s ambitious programme to make the country a manufacturing hub. Under the ‘Make in India’ scheme, the Indian government encourages major OEMs to set up a manufacturing base in India, one of the world’s fastest-growing smartphone markets. China’s Xiaomi, one of the world’s top smartphone companies, has been locally producing mobile phones in India. The company recently announced the opening of three new plants in India, including it’s first ever SMT (Surface Mount Technology) plant aimed towards local manufacturing of PCBA (Printed Circuit Board Assembly).