Don't just assemble, innovate: The missing hero in India's smartphone success story

India has emerged as the world's second-largest mobile phone manufacturer, driven by sustained policy support, particularly the PLI scheme. As global firms diversify supply chains amid geopolitical tensions, India has become a key manufacturing hub for top companies, accounting for 44% of smartphone shipments to the US in 2025.

Yet, despite this manufacturing success, Indian firms are confined to device assembly, while higher-value activities such as design, tech development, IP and component innovation continue to be dominated by companies based in the US, Europe and China. If India is to transition from a manufacturing destination to a global tech powerhouse, it must enable domestic firms to capture a much larger share of value creation.

The experience of India's home-grown mobile phone brands offers an important lesson. Companies such as Lava, Micromax and Intex once held significant market share, but were unable to sustain their competitive position when low-cost Chinese manufacturers entered the market.


Their business models relied on distribution networks and market access. As competition intensified and online commerce expanded, these advantages eroded rapidly. What was missing was a durable moat: investment in R&D that could have generated innovative product offerings, protected by patents that could be licensed to grow their businesses.

Smartphones operate on standardised technologies that underpin 3G, 4G and 5G networks. Many of these technologies are protected by standard essential patents (SEPs), which protect inventions that are indispensable for building products that are compliant with global telecom standards. Manufacturers must obtain licences to use these standardised technologies to allow for interoperability across borders, typically on fair, reasonable and non-discriminatory (FRAND) terms. Licensing disputes between Indian mobile manufacturers and multinational SEP holders have periodically led to litigation, revealing that technological foundations of the global mobile ecosystem is outside India.

However, given that licensing is typically negotiated after the standardised technology has been incorporated into the product, the existing framework has largely enabled access to standardised technologies across sectors. Research by ICRIER highlights how FRAND-based licensing has facilitated the adoption of connectivity technologies not only in smartphones, but also in automotive, consumer electronics and agritech applications.

Several Indian firms, for instance, are integrating cellular connectivity into EVs, demonstrating how access to standardised technologies through licensing frameworks can spur innovation, expand consumer choice and enable firms to build on global technological standards.

Access to standardised technologies is a necessary condition for growth, but not a sufficient one. Long-term competitiveness will depend on whether Indian firms can move beyond implementing technologies developed elsewhere and begin creating technologies of their own that would also facilitate their integration into GVCs.

There are some green shoots, as certain Indian firms manufacturing mobile phones for leading global brands are expanding into component manufacturing. Their potential evolution from contract manufacturing to product design and technology development aligns with the objectives of Make in India and Aatmanirbhar Bharat.

Yet, moving from assembly to design is only part of the journey. Contract manufacturing may be a commercially successful business model but it is unlikely to be sufficient to drive innovation-led growth. Countries that dominate global tech markets do so not because they assemble the most devices, but because they own the technologies that underpin them.

Hence, Indian firms must build on their nascent manufacturing and design strengths by investing in R&D and expanding their patent portfolios, thereby strengthening India's technological leadership. While manufacturing scale has laid a strong foundation, moving up the value chain will require sustained investment in innovation and the creation of domestic intellectual property.

At Bharat Innovates 2026, PM Modi envisioned India evolving from a consumer of global solutions to a provider of them. Realising that ambition will require shifting the focus from assembling more phones to developing technologies, commercialising patents and designing products in India.

By creating and monetising their own innovations rather than relying on those developed elsewhere, Indian firms can accelerate India's transition from an assembly-led manufacturing base to an innovation-driven technology powerhouse.