India is preparing a new round of incentives aimed at boosting smartphone exports and encouraging deeper local manufacturing. The proposed policy is expected to benefit major global brands such as Apple and Samsung along with their manufacturing partners operating in the country.
The new initiative is likely to replace the current Production-Linked Incentive (PLI) scheme, which is set to expire on March 31. Unlike the existing program that focuses mainly on increasing domestic production, the upcoming policy will reward companies for exporting smartphones and using locally manufactured components.
Policy
The proposed incentive plan represents the second phase of India’s smartphone manufacturing strategy. The government intends to move beyond basic device assembly and focus on building a stronger electronics ecosystem.
Under the current PLI scheme, companies receive incentives based on incremental production levels. However, the new program is expected to link subsidies directly to export performance and local value addition.
The policy is still being finalized through inter-ministerial discussions, and details such as the total budget and incentive structure may change before the final announcement.
Apple
Apple has become one of the biggest contributors to India’s smartphone export growth. Contract manufacturers producing iPhones in India currently account for around three-fourths of the country’s total smartphone exports.
The tech giant has been rapidly expanding its production footprint in India as part of its strategy to diversify manufacturing outside China.
| Company | Role in India |
|---|---|
| Apple | Major smartphone exporter |
| Samsung | Large-scale smartphone manufacturing |
| Apple Suppliers | Assembly and component production |
Apple is reportedly planning to ship most of its US-bound iPhones from India by the end of the year, further strengthening India’s position as a major smartphone export hub.
Exports
India has emerged as one of the fastest-growing smartphone export centers in recent years. Government incentives and growing investment from global brands have played a key role in this transformation.
The new incentive plan aims to accelerate this trend by rewarding companies that ship devices overseas.
| Incentive Focus | Purpose |
|---|---|
| Export-linked benefits | Encourage global shipments |
| Local sourcing incentives | Boost domestic supply chain |
| Value addition rewards | Move beyond basic assembly |
By linking subsidies to exports, policymakers hope to integrate India more deeply into global electronics supply chains.
Localization
Another important feature of the new policy is its focus on localization. The government wants manufacturers to source more components from domestic suppliers instead of relying heavily on imports.
Companies that use locally produced parts such as camera modules, display assemblies, and other electronic components may receive higher incentives.
| Component | Potential Local Manufacturing |
|---|---|
| Camera modules | Domestic suppliers |
| Display assemblies | Local manufacturing |
| Sub-assemblies | Indian electronics firms |
Devices that meet higher local value addition thresholds and are exported could qualify for the maximum subsidy under the new scheme.
Challenges
Despite significant progress, India still faces several challenges in building a fully integrated smartphone supply chain.
High-value components such as semiconductors and advanced modules are still largely imported from countries including China, Taiwan, and South Korea.
| Challenge | Impact |
|---|---|
| Limited supplier base | Slower component localization |
| Logistics costs | Higher production expenses |
| Scale differences | China remains more efficient |
Apple’s expansion in India has also been affected by the limited number of suppliers capable of meeting its strict quality standards.
China
The new incentive structure also reflects India’s long-term strategy to compete with China as a global manufacturing hub.
Prime Minister Narendra Modi’s Make in India initiative aims to transform the country from a domestic assembly center into a key player in global supply chains.
Instead of focusing only on import substitution, the government is now emphasizing exports, localization, and value addition.
Future
The upcoming policy is expected to work alongside the Electronics Components Manufacturing Scheme, which aims to promote domestic production of critical electronic parts.
Recently, Dixon Technologies, one of India’s largest contract electronics manufacturers, received approval to form a joint venture with China’s HKC Corp. to manufacture display modules in India.
With the current PLI scheme nearing its end, smartphone manufacturers are eagerly awaiting details of the new incentive program to plan their export strategies.
India’s push for export-linked incentives marks the next phase of its electronics manufacturing journey. By encouraging higher local value addition and global exports, the government aims to strengthen the country’s role in the global smartphone supply chain. If successfully implemented, the new incentives could attract more investments from global tech giants while helping India emerge as a major manufacturing alternative to China.
FAQs
What is India’s new smartphone incentive plan?
It is a proposed scheme linking subsidies to smartphone exports and local components.
Which companies will benefit from the plan?
Companies like Apple, Samsung and their suppliers may benefit.
What will replace the current PLI scheme?
A new export-focused incentive program is expected to replace it.
Why is India focusing on localization?
To increase domestic value addition and reduce imports.
When does the current smartphone PLI scheme end?
The existing PLI program ends on March 31.
