Govt weighing new smartphone incentives in 2026, says top official

A final call on the exact contours of the new or an extended mobile phone PLI scheme has not been taken, and the quantum of incentives has not been decided, S Krishnan, secretary at the ministry of electronics and IT (Meity), said in an interview.

“There’s an analysis which shows that some degree of disability continues in the mobile phone electronics industry. While the situation has improved significantly, there still are areas that require improvement and support. The electronics component manufacturing scheme (ECMS), too, will take at least two years or so to really provide support in terms of cost reduction," Krishnan said.

“This means that the support that will come in terms of cheaper imports and so on through ECMS, which will reduce disabilities, will still take some more time to kick in," he said. “To this extent, it’s important that we see what can be done. The other reason here is that mobile manufacturing is one PLI that has been very successful, so ending it too early may jeopardize the gains that India has made."

The current mobile phone PLI scheme, launched on 1 April 2020, offered manufacturers cash incentives of 4-6% of the turnover from locally made devices. With an outlay of ₹40,995 crore over six years, the mobile phone PLI accounted for 20% of ₹1.97 trillion in incentives offered by the Centre across 14 such schemes.

The government has disclosed the amount of investment the PLI scheme attracted and the total production it has led to. But it hasn't disclosed its net inventive payout since April 2020.

On 13 February, the Indian Express reported, citing a response to its right to information query, that between FY22 and FY25, the Centre had disbursed ₹8,700 crore in incentives to mobile manufacturers, 98% of which went to five companies—Foxconn, Tata Electronics, Pegatron, Samsung and Dixon-owned Padget Electronics. Pegatron is now owned by Tata Electronics.

The incentives scheme spawned companies such as Tata Electronics, which reported ₹66,601 crore in revenue last fiscal. The scheme also boosted India’s electronics manufacturing services (EMS) industry, which includes Dixon Technologies, Amber Enterprises and others. Taiwanese contract manufacturer Foxconn’s India unit, FIH Mobile Ltd, also set up shop in India.

Together, the industry reported revenue of over ₹1.25 trillion ($14 billion) last fiscal. However, profits still remain very slim, with core components such as semiconductor chips and displays still being imported.

“The industry has requested us to extend the scheme or provide a new scheme to support mobile manufacturing. They’ve given us some proposals, which we are discussing internally. No final call has been taken yet, but we are working on it," Krishnan added.

On 23 July, the Centre said in a note that schemes such as mobile phone PLI have increased mobile manufacturing factories from two in FY15 to 300 as of 31 March 2025. In FY25, India manufactured electronics goods worth ₹11.3 trillion, and exported ₹3.27 trillion—driven by incentives for mobile phones and laptops.

Emails sent to Foxconn, Tata Electronics, Dixon and Samsung on extension of mobile PLI did not receive responses until press time.

“While a further extension of mobile incentives would be welcome, it is important to note that this must be done with strategic modifications," said Ashok Chandak, president of industry body India Electronics and Semiconductor Association. “These changes would include things such as mandating manufacturers to meet localization targets, so that the domestic value addition of India’s electronics industry can grow. A shorter, sharper incentive scheme for mobile phones can thus be majorly beneficial for India."

Ankush Wadhera, managing director and partner at Boston Consulting Group (BCG) India, said the rationale would be to extend incentives for electronics in order to fill up strategic gaps in the industry, including the cost disadvantage that exists in parts of the value chain.

“There is a finite amount of resources that can go into incentivizing the semiconductor and electronics ecosystems in India," he said. “The industry will benefit from the balanced approach being undertaken by the government to boost semiconductor localization, last-stage assemblies and upstream components manufacturing. To this end, mobile phone incentives will further help in India’s efforts to reduce dependency on imports and boost local manufacturing."