India Plans Export-Linked Incentives to Boost Smartphone Manufacturing

India is preparing a new round of incentives for smartphone manufacturers that will prioritize exports and the use of locally produced components. The proposed policy is expected to benefit global companies such as Apple and Samsung Electronics, along with their supply chain partners operating in the country.

The new initiative is likely to serve as the second phase of the government’s flagship smartphone manufacturing push, succeeding the current Production-Linked Incentive (PLI) scheme that concludes on March 31. While the existing program mainly rewarded companies for increasing domestic production, the upcoming framework is expected to link financial incentives directly to export performance and higher levels of local value addition.

According to people familiar with the discussions, the government is still finalising the structure of the incentives, including the subsidy levels and the overall budget. The proposal is currently undergoing inter-ministerial consultations and may evolve before being formally announced.

The move highlights the increasing role of Apple in India’s electronics manufacturing ambitions. Contract manufacturers producing iPhones in India already account for nearly three-fourths of the country’s smartphone exports. The company is reportedly aiming to ship a majority of its United States-bound iPhones from India by the end of the year, further strengthening the country’s position as a major global handset export base.

Government officials believe the first phase of the incentive program has largely succeeded in ensuring that most smartphones sold in India are assembled domestically. The next step in the strategy focuses on increasing value addition within the country by expanding local component manufacturing.

Under the proposed framework, incentives may be structured in tiers based on the level of localisation in each device. Manufacturers sourcing key components—such as camera modules, display assemblies and other sub-parts—from Indian suppliers could receive higher benefits, especially if those devices are exported.

The government also hopes the new policy will encourage major Chinese smartphone brands such as Xiaomi, Oppo and Vivo to use India as an export hub rather than focusing primarily on the domestic market.

The initiative aligns with the broader vision of Narendra Modi’s Make in India program, which aims to position the country as a global manufacturing powerhouse and strengthen its role in international electronics supply chains.

Source: Business Standard