Drop in sales during coronavirus lockdown may cost India's mobile phone makers Rs 15,000 crore

New Delhi: India's mobile phone sector is likely to face a loss of Rs 15,000 crore as sales take a hit in a country that has been locked down to prevent the spread of the novel coronavirus.

People may not have the time or inclination to think about purchasing new phones while contending with a grocery shortage and balancing work from home and attending to their children. But it’s not just sales that are hit, it is the supply chain itself.

The phone makers are unable to get ready products shipped from overseas as transport of non-essential cargo has come to a halt.

India Cellular and Electronics Association chairman Pankaj Mohindroo told PTI that the members were approaching the government to help mitigate their losses.

Xiaomi, which leads India's smartphone market, had told all of its 30,000 staff to work from home even before the 21-day lockdown starting March 25 was announced by Prime Minister Narendra Modi.

An executive of the mobile phone company said that smaller companies in the sector were facing losses of Rs 5-6 crore a day and the figure was higher for bigger companies.

 “Earlier, the business suffered due to (shortage of) supply of components from China... and now we are facing issues in shipments of ready products,” the executive said. “There has been no revenue collection since March 23 for companies that sell through retail stores.”

“There are fixed costs that all the companies have to bear without any revenue inflow,” he said explaining the operational loss.

Around 268 companies in India work in the mobile manufacturing segment.

The production of mobile phones in the country stood at around Rs 1.7 lakh crore in 2018-19 and the domestic demand was almost completely being met by domestic production.