BPSC 70th CCE Prelims General Studies · Question 27 of 143

Correct — A, 2nd. India is the world's second-largest manufacturer of mobile phones, behind China, and the Government states it in exactly those words in its own annual economic assessment. Chapter 9 of the Economic Survey 2022-23 records that 'in the mobile phone segment, India has become the second-largest mobile phone manufacturer globally, with the production of handsets going up from six crore units in FY15 to 31 crore units in FY22'. That is a fivefold rise in seven years, and it is the number the rank rests on. Policy did most of the work. Import duties were raised in stages so that assembly had to move into the country, and the Production Linked Incentive scheme then paid manufacturers on incremental sales of India-made handsets; the Survey notes that major global and domestic electronics manufacturing services companies had already taken up the scheme. The results show up in trade data. India's electronics exports to the United States moved from a deficit of USD 0.6 billion in FY17 to a surplus of USD 8.7 billion in FY24, and within electronics the fastest-growing category was mobile phones, whose exports to the United States rose from USD 2.2 billion in FY23 to USD 5.7 billion in FY24. Apple alone assembled about USD 14 billion worth of iPhones in India during FY24, roughly 14 per cent of its global iPhone production. One honest qualification belongs on this card: 'manufacture' here still means assembly for the most part. Domestic value addition in mobile phone output rose from about 8.7 per cent in FY17 to FY19 to 22 per cent in FY20 to FY22 — real progress, but still a minority of the value of each handset.

• (b)10th — 10th — the answer that feels safely modest, and the kind of rank India genuinely held in electronics a decade or more ago before the assembly base moved here. It understates the position by eight places. A country producing more than thirty crore handsets a year is not tenth at anything in that industry, and the figure is easy to check against the growth curve in the Economic Survey.
• (c)4th — 4th — the most dangerous of the wrong options, because it is close enough to be believable and because India really does rank third, fourth or fifth in a long list of other sectors, so 'India is in the top five' is a habit of mind rather than a specific memory. On mobile phones specifically the position is second, and it has been stated as second in successive Government documents.
• (d)15th — 15th — outside any plausible range and included to complete the spread of the option list. A rank in the teens would put India below most of the smaller manufacturing economies of Europe and South-East Asia, which is inconsistent with the handset output figures the Government publishes and with India's position as a major exporter of phones to the United States.

Electronics is the sector where India's manufacturing policy of the last decade has produced its clearest measurable result, and the mobile handset is the case study. Two instruments did the work. The first was tariff sequencing: customs duties on finished handsets and then on successive components were raised in phases, so that a company selling phones in India found it cheaper to assemble them here than to import them. The second was the Production Linked Incentive scheme, which pays a manufacturer a percentage of the incremental sales of goods made in India, converting a subsidy into a reward for output rather than for investment alone. The result was that handset production rose from six crore units in FY15 to thirty-one crore in FY22 and India moved to second place globally. The analytical caution that goes with the achievement is the distinction between assembly and value addition. A phone assembled in India whose display, chipset and camera module are imported adds only a fraction of its price to Indian value added, which is why the Economic Survey tracks domestic value addition separately and why it rose from about 8.7 per cent to 22 per cent between the two phases it compares. Rank measures units; value addition measures how much of each unit is genuinely ours.

Start by discarding on scale. India produces well over thirty crore handsets a year and exports billions of dollars' worth of them to the United States alone, which is not consistent with a rank of tenth or fifteenth, so options (b) and (d) can go without any specific recall. That leaves second against fourth, and here the reasoning is about how the industry is structured rather than about memory. Mobile phone manufacturing is heavily concentrated: China dominates it, and after China the field falls away quickly, so a country producing at India's volume is not competing for fourth place — it is either second or nowhere near the top. The Government has stated the second position in successive Economic Surveys since around 2019, which is why the phrasing recurs unchanged in current-affairs material. One point of precision worth holding for a harder version of this question: the rank is for manufacturing by units. On the value of electronics output, or on semiconductor fabrication, India ranks nowhere near second, and an examiner who changes the measure changes the answer.

• Economic Survey 2022-23, Chapter 9, paragraph 9.23: 'In the mobile phone segment, India has become the second-largest mobile phone manufacturer globally, with the production of handsets going up from six crore units in FY15 to 31 crore units in FY22.'
• India's electronics exports to the United States moved from a trade deficit of USD 0.6 billion in FY17 to a trade surplus of USD 8.7 billion in FY24, with mobile phone exports to the US rising from USD 2.2 billion in FY23 to USD 5.7 billion in FY24.
• Apple assembled about USD 14 billion worth of iPhones in India during FY24, some 14 per cent of its global iPhone production, and Foxconn has begun producing Apple phones in Karnataka and Tamil Nadu.
• Domestic value addition in mobile phone output rose from an average of about 8.7 per cent in FY17 to FY19 to 22 per cent in FY20 to FY22; the direct workforce in mobile phone production more than tripled between FY17 and FY22, and wages and salaries rose by 317 per cent between the two phases.
• The Production Linked Incentive scheme is the principal instrument behind the shift, paying manufacturers on incremental sales of goods made in India rather than on investment alone.
• Other Indian ranks stated in the same Economic Survey chapter, useful as a comparison set: India is third in the world in pharmaceutical production by volume and fourteenth by value, supplies about 20 per cent of global generic medicines by volume and about 60 per cent of the world's vaccines.

• Answering from the general impression that India is somewhere in the global top five. On mobile phones the specific position is second, and 4th exists on the list precisely to catch that impression.
• Treating manufacturing rank as a measure of technological depth. India ranks second on units assembled while domestic value addition per handset was still about 22 per cent.
• Confusing the measure. The rank is for handset manufacturing; India's position in electronics exports by value, or in semiconductor fabrication, is entirely different.

BPSC asks India's global position as a bare rank pinned to a year, drawing the figure from the Economic Survey or a ministry press release and filling the options with a plausible near-miss and two implausible extremes — so the mark turns on whether the exact number was read rather than the general impression absorbed. UPSC almost never asks a bare rank; it embeds the same claim in a statement set, pairing 'India is the largest producer and exporter of X' with two further statements that must each be judged, or asks why a country's dominance of a product matters strategically.

• practice — not a real PYQ

  According to the Economic Survey, India's production of mobile handsets rose from six crore units in FY15 to approximately how many units in FY22 ?

  • (a)12 crore
  • (b)20 crore
  • (c)31 crore
  • (d)50 crore

  Answer(c) 31 crore — a roughly fivefold increase in seven years, and the output figure behind India's position as the world's second-largest manufacturer of mobile phones.

• practice — not a real PYQ

  In the pharmaceutical industry, India's global rank is

  • (a)1st by volume and 3rd by value
  • (b)3rd by volume and 14th by value
  • (c)5th by volume and 5th by value
  • (d)10th by volume and 2nd by value

  Answer(b) 3rd by volume and 14th by value, as stated in the Economic Survey. India supplies about 20 per cent of the world's generic medicines by volume and about 60 per cent of its vaccines — a gap between volume rank and value rank of the same kind that appears in electronics.