India is the second largest manufacturer of mobile phones in the world — option 2, behind China.

How the position was reached. In 2014-15 India assembled only a small fraction of the handsets it used and imported nearly all of them. A decade later it makes the overwhelming majority of the phones sold in the country and has become a substantial exporter as well. Production rose from a few crore units to over thirty crore a year, and the value of output multiplied many times over.

What drove the change. Three policies did most of the work. The phased manufacturing programme from 2016 raised customs duties step by step on finished handsets and then on sub-assemblies, so that it became cheaper to assemble in India than to import. The Production Linked Incentive scheme for large-scale electronics, announced in 2020, paid manufacturers a percentage of incremental sales and drew in Apple’s contract makers — Foxconn, Pegatron and Wistron — as well as Samsung, which built one of the world’s largest mobile factories at Noida. Make in India and the electronics-cluster schemes provided the land and infrastructure.

The qualification worth knowing. Much of this is still assembly: displays, chips and camera modules are largely imported, so the domestic value addition per handset, though rising, remains modest. Deepening the component base is the stated aim of the semiconductor mission and of the component-manufacturing incentives that followed.

Exports have grown fastest of all, with smartphones becoming one of India’s largest single export items and the United States the biggest destination.

Hence, the answer is 2^nd.