The Union Cabinet has approved ₹62,500 crore to extend the production-linked incentive scheme for mobile manufacturing. This funding aims to sustain India's growth as a major electronics exporter following a sharp rise in output to ₹5.5 lakh crore in FY 2025. Investors are looking at how this long-term support impacts domestic suppliers and global contract manufacturers.
The Union Cabinet has officially sanctioned ₹62,500 crore for the second phase of the Production-Linked Incentive (PLI) scheme for mobile phone manufacturing. This financial allocation is designed to further strengthen India's position in the global electronics supply chain by providing incentives to companies that meet specific production and export targets.
Scaling Production and Exports
This policy support comes after a period of rapid expansion in the domestic electronics sector. Total mobile phone production in India climbed to ₹5.5 lakh crore in the 2024-25 fiscal year, a significant rise from ₹2.14 lakh crore recorded in 2019-20. The sector's growth is supported by more than 300 manufacturing units currently operating across the country. Smartphone exports have also transformed the country's trade profile, reaching ₹2.62 lakh crore in the 2025 calendar year. Data indicates that overall mobile phone exports grew eight-fold over the last five years, moving from ₹0.27 lakh crore in 2019-20 to ₹2 lakh crore in 2024-25.
Impact on Market Dynamics
For investors, this news highlights the government's continued focus on electronics as a pillar of manufacturing-led economic growth. Global players like Apple Inc. have played a significant role in this transition, utilizing India as a key manufacturing hub. However, the electronics manufacturing sector remains subject to global demand cycles and supply chain complexities. While the incentives provide cost support, the long-term success of these units depends on their ability to maintain high utilization levels and compete with established manufacturing hubs in other regions. Additionally, as production volumes increase, the dependence on imported high-end components remains a factor that companies must manage to improve local value addition.
Looking Ahead for Electronics Manufacturing
Investors may monitor the specific rollout of these funds and the eligibility criteria for the next phase, which will determine how current contract manufacturers and local component suppliers benefit. The key monitorable will be whether this secondary phase can sustain the current pace of export growth amidst potential shifts in global technology demand. As the manufacturing base expands, attention will also turn to the steady increase in domestic value addition and the ability of the broader ecosystem to support these high-volume facilities.