Union Budget 2026: Smartphone Industry Hopes for Deep Localisation in Manufacturing

As India heads into Union Budget 2026, the smartphone industry is looking beyond headline assembly numbers and asking for policies that make local manufacturing less vulnerable to global shocks. The past year’s supply chain disruption has again exposed how quickly device plans can be thrown off by shortages, shipping delays, and abrupt price swings in critical inputs, especially when the bulk of components are still imported.

A key pressure point is cost. Component prices have been moving up across categories, and brands say inflation in memory and semiconductors is making it harder to keep mass-market phones affordable without squeezing margins. That has revived calls for targeted incentives that push manufacturing deeper into the supply chain—moving from final assembly toward higher domestic value addition in components and sub-assemblies.

“With global memory and semiconductor cost inflation impacting device affordability, the next phase of component-linked incentives and ECMS is critical to correcting cost structures, increasing domestic value addition and building resilient supply chains. Sustained and forward-looking policy support for electronic components and semiconductors is critical to reducing India’s import dependence, deepening localisation and strengthening the domestic electronics manufacturing ecosystem,” said Rajesh Sethi, Group Chief Financial Officer, Lava International Limited.

Industry executives also want Budget 2026 to address the input side of localisation, machines, design capability, and component engineering, rather than only output-linked manufacturing. “We need a fiscal runway that rationalises duties on high-tech capital machinery and incentivises domestic R&D for core components like PCBAs and batteries. The government has given us the volume; now we need the policy support to own the value. This budget should be about empowering Indian brands to own the intellectual property, not just the factory floor,” said Ritesh Goenka, Managing Director, Damson Technologies, which owns brands like Just Corseca and Ducasso.

Beyond phones, the wider electronics chain is also pushing for better traceability and standardisation—areas that become more important when companies juggle multiple suppliers during disruption. “Policy initiatives that strengthen supply chains, improve traceability, and encourage standardisation are expected to accelerate adoption of durable and accurate labelling technologies. These solutions play a vital role in enhancing operational accuracy, compliance, and inventory management across industries,” said Alok Nigam, Managing Director for Brother India International.

Finally, companies want a Budget that supports demand while helping factories run smarter and more connected. “We are expecting the budget to support consumption and manufacturing priorities. Measures that sustain demand, reinforce investments in customer experience, analytics, and scalable digital front ends will be instrumental. Additionally, manufacturing-focused initiatives will help accelerate investments in automation, real-time visibility, and connected operations across factories and supplier ecosystems. From a technology standpoint, sustained emphasis on large-scale skilling and upskilling is equally important. Building internal capability alongside partnerships with established and emerging technology providers will propel responsible AI adoption at scale,” said Krishnan Venkateswaran, Chief Digital & Information Officer, Titan Company Ltd.

For the smartphone sector, the message is clear: after scaling production, the next test is whether Budget 2026 can help India capture more of the component value chain—and reduce the risk that the next global crunch will once again raise prices overnight.

Read more: Apple's iPhone Sales Reach New Quarterly High, Boosted by Soaring Demand in India