Government May Soon Announce New Subsidy Scheme for Smartphone Production

India is preparing a new incentive programme to support local smartphone manufacturing after the current production-linked incentive (PLI) scheme expires this month, according to a Reuters report citing two sources familiar with the matter.

The move signals that the government intends to continue backing one of the country’s fastest-growing manufacturing sectors, which has become central to Prime Minister Narendra Modi’s push to expand domestic electronics production.

Focus on exports

The new scheme may link subsidies more directly to export performance, per the report. The government is considering making the incentives applicable to investments starting April this year, as it attempts to strengthen India’s position as a global smartphone manufacturing hub.

Officials are also looking to ensure India remains competitive against China, especially as trade dynamics shift in the United States. According to Reuters, India risks losing some tariff advantages over China after a court ruling invalidated a fentanyl-related levy imposed on Beijing during former US President Donald Trump’s administration.

PLI scheme helped expand production

Global companies including Apple and Samsung have relied heavily on India’s $21 billion production-linked incentive scheme, which was introduced to attract large-scale electronics manufacturing and reduce dependence on imports.

The programme has helped Apple gradually expand its manufacturing footprint in India. The company initially assembled lower-cost iPhones locally but now produces some of its latest and most expensive models in the country.

The tariffs imposed on Chinese imports during Trump’s presidency also accelerated this shift, encouraging companies to diversify production beyond China.

Smartphone manufacturing surges

Government data cited by Reuters shows how quickly the sector has expanded. India produced nearly $60 billion worth of mobile phones in the 2024–25 fiscal year, representing a 28-fold increase over the past decade.

Exports have grown even faster. Mobile phone shipments abroad reached $21.7 billion during the same period, a 127-fold increase, making smartphones India’s largest exported product in 2025.

Bigger electronics ambition

The government’s broader goal is to scale India’s electronics manufacturing to $500 billion by the fiscal year 2030.

Officials from the Ministry of Electronics and Information Technology have already held consultations with industry leaders while designing the new incentive structure, according to an industry executive cited by Reuters.

The ministry has not yet issued an official statement on the proposed programme.

If announced, the new scheme would extend India’s strategy of using subsidies and export incentives to build a manufacturing ecosystem capable of competing with established supply chains in China and Southeast Asia.

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