India's smartphone Production Linked Incentive (PLI) scheme reached $71 billion in production for FY26, up from $30 billion in FY20. With exports growing tenfold to $29.4 billion, the success of this policy is now sparking government discussions regarding potential extensions and its application as a model for other manufacturing sectors.
The Production Linked Incentive (PLI) scheme for smartphones has achieved significant milestones, with production value rising to $71 billion in the 2026 fiscal year compared to $30 billion in 2020. Industry data shared with the Commerce Ministry indicates that this growth has been driven by a major push in domestic manufacturing and exports. Mobile phone exports, in particular, surged from $3 billion to $29.4 billion over the same six-year window, helping India cement its position as the second-largest mobile phone manufacturer globally after China.
Domestic Value Addition Increases
A critical measure of the scheme's impact is domestic value addition, which has quadrupled to reach approximately 18-19%. Industry stakeholders pointed out that this progress is notable because it occurred within six years, a timeframe they described as significantly faster than the historical development pace observed in China's electronics sector. This increase in local value addition suggests that more components and assembly processes are shifting into India, rather than relying solely on imported semi-finished goods for final assembly.
Policy Impact and Trade Dynamics
The India Cellular and Electronics Association (ICEA), which represents major manufacturers including Apple, Foxconn, and Google, has presented these figures to the government as evidence of the policy's effectiveness. The scheme has influenced trade patterns, with mobile phones now representing 21% of India's total merchandise exports to the United States. Between 2024 and 2025, exports of these devices to the U.S. grew by 178%, reaching $19.7 billion. This shift highlights how the PLI has helped Indian manufacturing integrate more deeply into global supply chains.
Future Considerations for Investors
The government is currently in inter-ministerial discussions regarding the potential extension of the smartphone PLI framework. For investors, the success of this scheme provides a template for how similar incentives may be designed for other sectors in the future. While the production growth is substantial, the long-term benefit for listed manufacturing and component companies will depend on how sustainably this value addition continues to grow. Investors may monitor future policy announcements regarding the potential extension of the scheme, as this will influence capital allocation and expansion plans for companies involved in the electronics ecosystem.