How does low domestic value addition in phone assembly affect India's economic growth and technological self-reliance?

Low domestic value addition in phone assembly means that most of the components and technology used in manufacturing phones are imported, with only a small portion of the production process—mainly assembly—taking place in India. This has several implications for India's economic growth and its goal of technological self-reliance:

• Limited Job Creation: Assembly work is less skill-intensive and generates fewer high-quality jobs compared to manufacturing core components like semiconductors, displays, or chipsets.
• Low Economic Multipliers: When value addition is low, the benefits to the local economy are limited. Ancillary industries such as component manufacturing, logistics, and R&D do not develop as strongly.
• Trade Deficit Concerns: High dependence on imported components increases the import bill, worsening the trade deficit and making the economy vulnerable to global supply chain disruptions.
• Slow Technology Transfer: Minimal domestic value addition means limited opportunities for Indian firms and workers to learn advanced manufacturing techniques, which hampers the development of indigenous technological capability.
• Weak Innovation Ecosystem: Without a strong base in component manufacturing and design, India finds it difficult to foster innovation, research, and development in the electronics sector.
• Dependence on Foreign Firms: Reliance on global supply chains and foreign technology providers restricts India's ability to control critical technologies and reduces bargaining power in international markets.
• Challenges to Atmanirbhar Bharat: Low value addition goes against the objectives of initiatives like 'Make in India' and 'Atmanirbhar Bharat,' which aim to build a self-reliant and robust domestic manufacturing sector.