Keeping with the trend in most industries under study, the mobile phone industry has also witnessed an increase in its size of grey market. It went up from 20.8% in 2012 to 25.4% in 2014. This translates into a loss of Rs 19,066 crore to the industry and Rs 6,705 crore to the government in terms of revenue.

While the impact of grey markets on investment and innovation can’t be estimated in absence of data, the industry is highly dependent on imports of finished goods. This implies that value additions and jobs are being created overseas and not domestically. This trend needs to be corrected immediately if the ‘Make in India’ initiative has to succeed. For further details please view our report.…