As smartphone production continues to shift away from China and into new manufacturing hubs, India is gradually becoming one of the most important destinations for global tech companies. Over the past few years, the country has attracted major smartphone manufacturers with government subsidies aimed at boosting local production.
Now, India is preparing the next phase of that strategy, and it could reshape how companies like Apple and Samsung use the country in their global supply chains.
According to reports, the Indian government is drafting a new round of smartphone manufacturing incentives that will reward companies not just for producing phones locally, but for exporting them and using more components made within India. The plan would effectively replace the country’s current Production-Linked Incentive (PLI) scheme, which is set to expire at the end of March. While the original in India, such as display modules, camera units, or other subcomponents, was focused on increasing domestic production, the new version is expected to go further by encouraging manufacturers to turn India into a major export hub.
That shift reflects how much the country’s smartphone industry has already evolved. When the first PLI program launched, the goal was to convince global brands to assemble devices locally instead of importing them. In that sense, the policy worked. Today, a huge percentage of the smartphones sold in India are assembled in the country.
With that milestone reached, policymakers now want to move beyond basic assembly and push manufacturers to create more value within India’s supply chain.
Under the proposed scheme, companies could receive subsidies based on how many devices they ship overseas and how many locally produced components they use. The more a phone relies on parts sourced in India, such as display modules, camera units, or other subcomponents, the greater the potential incentives. Devices that both meet strong localisation thresholds and are exported could qualify for the largest subsidies.
Emmanuel Oyedeji
This new approach could particularly benefit Apple, whose contract manufacturers reportedly account for roughly three-quarters of India’s smartphone exports. As the iPhone maker continues expanding production in the country, reports suggest it plans to manufacture most iPhones shipped to the United States in India by the end of the year. The export-linked incentives could therefore strengthen Apple’s position while also encouraging suppliers to build deeper operations in the region.
Other smartphone brands could feel the effects as well. Companies such as Oppo, Vivo and Xiaomi currently manufacture many of their devices in India primarily for the domestic market. By tying subsidies to exports, the government is effectively nudging these brands to use their Indian factories as bases for global shipments rather than just local sales.
Ultimately, the broader goal ties into Prime Minister Narendra Modi’s push to turn India into a serious rival to China in electronics manufacturing. While India has already made significant progress in smartphone assembly, much of the industry’s high-value components still come from countries like China, South Korea and Taiwan.
Louis Eriakha
