India has approved new incentives for smartphone and semiconductor manufacturing as it tries to deepen its role in the global electronics supply chain. The measures build on India’s success assembling iPhones and aim to attract more high-value production away from China.
The government approved a ₹62,500 crore Mobile Phone Manufacturing Scheme, equal to about $6.5 billion, that will run for five years from fiscal 2026-27 to fiscal 2030-31. The official announcement said the programme will offer incentives of 2.25% to 5% on eligible sales of mobile phones made in India.
The scheme also includes an additional incentive of up to 1.5% for domestic sourcing of key components and sub-assemblies. Companies can receive another 3% incentive for product design and research aimed at developing Indian mobile phone brands.
India Looks Beyond Final Assembly
India has become a major smartphone assembly hub over the past decade, drawing production from Apple, Samsung, Xiaomi, Oppo and Vivo. Apple began assembling iPhones in India in 2017 and has expanded production through suppliers including Foxconn and Tata Group.
About 25% of Apple’s iPhones are now made in India, as the company reduces its dependence on China. New Delhi has also cleared a smartphone manufacturing joint venture between Vivo and Dixon Technologies, while cutting import duties on some phone and electronics components.
The new incentive programme is designed to push India beyond final assembly. The government expects mobile phone production under the scheme to reach about ₹39 trillion, or roughly $405 billion, and create about 60,000 direct jobs.
India still trails China by a wide margin. Counterpoint Research data cited by TechCrunch showed China accounted for 63% of global smartphone production in 2025, compared with India’s 18%.
Semiconductor Funding Also Expands
India also approved a further ₹1.28 trillion, or about $13.3 billion, for a fresh semiconductor push. The expanded programme adds to the $10 billion chip incentive plan launched in 2021 and will support equipment, materials, design, manufacturing and research.
The parallel smartphone and semiconductor programmes show how New Delhi is trying to build a fuller electronics ecosystem. India wants more suppliers, component makers and engineering expertise to develop locally, rather than simply importing parts for assembly.
IDC analyst Navkendar Singh told TechCrunch the new approach marks a shift from “assemble more” toward local value capture, research and depth in the supply chain. Counterpoint Research director Tarun Pathak said local production could help manufacturers reduce component costs, especially as memory prices rise and a weaker rupee makes imports more expensive.
India is also trying to rebuild domestic handset brands. Companies such as Micromax, Karbonn and Lava lost ground after Chinese brands expanded aggressively in the Indian market, and the new scheme includes design incentives aimed at helping local brands regain relevance.
The larger goal is to increase India’s share of global mobile phone production. Pankaj Mohindroo, chairman of the India Cellular and Electronics Association, said India should aim to account for 35% to 40% of worldwide mobile phone output.
India has proved it can win a larger role in global electronics manufacturing through iPhone assembly. The harder test will be whether component suppliers, chip capacity and higher-value design work follow.
Featured image credits: ITI Technical College
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