Sanjeev Agarwal, Executive Director and Chief Manufacturing Officer at Lava International, believes that the Production Linked Incentive (PLI) scheme for electronic components will significantly enhance the sector’s global competitiveness. Agarwal emphasized that the scheme, which previously helped the smartphone industry scale up, would now assist the electronics components sector in capturing a larger global market share.
He noted, “I see PLI catalysing the smartphone industry to scale up and become a global force. I believe the electronics components category will benefit from this scheme and help us become a global champion.”
Lava’s Approach To Component Sourcing and Strategy
Lava, known for its leadership in localizing smartphone production, plans to apply the same strategy to its wearables segment, including smartwatches. Although the company currently sources a minimal amount of components locally for its smartwatches, Agarwal expressed confidence that this will gradually increase as more domestic component manufacturers emerge.
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Agarwal shared, “We were one of the leading companies in localization starting from phones. We are going to replicate the same strategy in our smartwatches.”
Government’s Support To Boost Domestic Electronics Manufacturing
The Indian government’s recent approval of a nearly $3 billion (Rs 25,000 crore) incentive scheme aims to boost domestic manufacturing of electronics components. The scheme, expected to be rolled out in April, will cover critical components such as printed circuit boards (PCBs), camera modules, display sub-assemblies, lithium-ion cells, speakers, vibrator motors, and mechanics—components that together constitute about 50% of the bill of materials in mobile phones and laptops.
Wearables Industry Calls For Incentives To Reduce Import Dependency
The wearables industry, including smartwatch and True Wireless Stereo (TWS) device manufacturers, has also been advocating for similar incentives to reduce import dependency and promote innovation. Industry experts believe that a PLI scheme for these components will help drive job creation in India and reduce reliance on imports from countries like China.
Lava’s Strategy For The Wearables Market
As Lava looks to expand its presence in the wearables market, it is focusing on the premium segment. While the overall wearable market is divided, with 10% dedicated to premium products and 80-85% for mass-market devices, Lava plans to tap into the high-end segment, confident in its ability to provide an exceptional user experience.
“We have decided to tap into the premium segment because we believe we can provide an excellent experience to the users,” Agarwal stated.
Lava Strengthens Back-End Operations For Future Growth
To protect its market share in both smartphones and wearables, Lava is enhancing its back-end functions, including design, supply chain, and manufacturing. Agarwal explained that the company plans to apply the same approach to its wearables business, using its design and supply chain strength to create superior products and make technology more accessible to customers.
“We are going to do the same thing in watches, as we did with smartphones, and other wearable categories,” he added.
Challenges In The Wearables Market
The wearables market in India faced challenges in 2024, with shipments falling by 11.3% year-on-year to 119 million units, according to a report by market tracker International Data Corporation (IDC). This decline was mainly attributed to a decrease in smartwatch volumes, underscoring the competitive nature of the sector.
Strategic Focus On High-Value Products
While India’s electronics sector stands to benefit from the PLI scheme, experts, including Chandrasekhar, suggest that the country must focus on manufacturing products with high value and strategic importance. “There is no point in manufacturing low-cost, low-margin products with low entry barriers, which other countries can easily produce,” he advised.
The PLI scheme for electronics components is expected to pave the way for more localized production, increased innovation, and a stronger presence in global markets. As Lava and other Indian companies expand their portfolios, the sector looks set for continued growth, supported by both government initiatives and strategic business moves.
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